Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Feb. 28, 2020 | Jun. 29, 2019 | |
Cover page. | |||
Entity Incorporation, State or Country Code | NC | ||
Document Annual Report | true | ||
Title of 12(b) Security | Common Stock, No Par Value | ||
Entity Registrant Name | KONTOOR BRANDS, INC. | ||
Entity Trading Symbol | KTB | ||
Entity Central Index Key | 0001760965 | ||
Current Fiscal Year End Date | --12-28 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 28, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 57,042,089 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Public Float | $ 1,587 | ||
Security Exchange Name | NYSE | ||
Document Transition Report | false | ||
Entity File Number | 001-38854 | ||
Entity Tax Identification Number | 83-2680248 | ||
Entity Address, Address Line One | 400 N. Elm Street | ||
Entity Address, City or Town | Greensboro | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27401 | ||
City Area Code | 336 | ||
Local Phone Number | 332-3400 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Documents Incorporated by Reference | Documents Incorporated By Reference: Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders to be held on April 21, 2020 are incorporated by reference into Part III of this Annual Report on Form 10-K, which definitive Proxy Statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Current assets | ||
Cash and equivalents | $ 106,808 | $ 96,776 |
Accounts receivable, net of allowance for doubtful accounts of $11,852 and $10,549 at December 2019 and December 2018, respectively | 228,459 | 252,966 |
Due from former parent, current | 0 | 547,690 |
Notes receivable from former parent | 0 | 517,940 |
Inventories | 458,101 | 473,812 |
Prepaid expenses and other current assets | 84,235 | 52,014 |
Total current assets | 877,603 | 1,941,198 |
Due from former parent, noncurrent | 0 | 611 |
Property, plant and equipment, net | 132,192 | 138,449 |
Operating lease assets | 86,582 | 0 |
Intangible assets, net | 17,293 | 53,059 |
Goodwill | 212,836 | 214,516 |
Deferred income taxes | 79,551 | 42,891 |
Other assets | 111,099 | 67,741 |
TOTAL ASSETS | 1,517,156 | 2,458,465 |
Current liabilities | ||
Short-term borrowings | 1,070 | 3,215 |
Accounts payable | 147,347 | 134,129 |
Due to former parent, current | 0 | 16,140 |
Notes payable to former parent | 0 | 269,112 |
Accrued liabilities | 194,744 | 194,228 |
Operating lease liabilities, current | 35,389 | 0 |
Total current liabilities | 378,550 | 616,824 |
Operating lease liabilities, noncurrent | 54,746 | 0 |
Deferred income taxes | 2,459 | 2,679 |
Other liabilities | 98,875 | 115,510 |
Long-term debt | 913,269 | 0 |
Commitments and contingencies | ||
Total liabilities | 1,447,899 | 735,013 |
Equity | ||
Preferred Stock, no par value; shares authorized, 90,000,000; no shares outstanding at December 2019 and 2018 | 0 | 0 |
Common Stock, no par value; shares authorized, 600,000,000; 56,811,198 shares outstanding at December 2019 and no shares outstanding at December 2018 | 0 | 0 |
Additional paid-in capital | 150,673 | 0 |
Former parent investment | 0 | 1,868,634 |
Accumulated deficit | (1,718) | 0 |
Accumulated other comprehensive loss | (79,698) | (145,182) |
Total equity | 69,257 | 1,723,452 |
TOTAL LIABILITIES AND EQUITY | $ 1,517,156 | $ 2,458,465 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 11,852 | $ 10,549 |
Preferred Stock, par value (in USD per share) | $ 0 | $ 0 |
Preferred Stock, shares authorized (in shares) | 90,000,000 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common Stock, stated value (in USD per share) | $ 0 | $ 0 |
Common Stock, shares authorized (in shares) | 600,000,000 | 0 |
Common Stock, shares outstanding (in shares) | 56,811,198 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Income Statement [Abstract] | |||
Net revenues | $ 2,548,839,000 | $ 2,763,998,000 | $ 2,830,106,000 |
Costs and operating expenses | |||
Cost of goods sold | 1,544,465,000 | 1,649,435,000 | 1,658,144,000 |
Selling, general and administrative expenses | 803,448,000 | 781,521,000 | 814,544,000 |
Non-cash impairment of intangible asset | 32,636,000 | 0 | 0 |
Total costs and operating expenses | 2,380,549,000 | 2,430,956,000 | 2,472,688,000 |
Operating income | 168,290,000 | 333,042,000 | 357,418,000 |
Interest income from former parent, net | 3,762,000 | 7,738,000 | 3,372,000 |
Interest expense | (35,787,000) | (1,173,000) | (1,263,000) |
Interest income | 3,931,000 | 5,740,000 | 2,984,000 |
Other expense, net | (5,002,000) | (5,269,000) | (3,358,000) |
Income before income taxes | 135,194,000 | 340,078,000 | 359,153,000 |
Income taxes | 38,540,000 | 77,005,000 | 242,962,000 |
Net income | $ 96,654,000 | $ 263,073,000 | $ 116,191,000 |
Earnings per common share | |||
Basic (in USD per share) | $ 1.71 | $ 4.64 | $ 2.05 |
Diluted (in USD per share) | $ 1.69 | $ 4.64 | $ 2.05 |
Weighted average shares outstanding | |||
Basic (in shares) | 56,688 | 56,648 | 56,648 |
Diluted (in shares) | 57,209 | 56,648 | 56,648 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 96,654 | $ 263,073 | $ 116,191 |
Foreign currency translation | |||
Gains (losses) arising during the period | 3,167 | (22,700) | 26,682 |
Income tax effect | 0 | 0 | (1,076) |
Defined benefit pension plans | |||
Current period deferred actuarial losses | (2,010) | 0 | 0 |
Income tax effect | 767 | 0 | 0 |
Derivative financial instruments | |||
Gains arising during the period | 1,729 | 0 | 0 |
Income tax effect | 21 | 0 | 0 |
Reclassification to net income for gains realized | (7,380) | 0 | 0 |
Income tax effect | 706 | 0 | 0 |
Total other comprehensive income (loss), net of related taxes | (3,000) | (22,700) | 25,606 |
Comprehensive income | $ 93,654 | $ 240,373 | $ 141,797 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
OPERATING ACTIVITIES | |||
Net income | $ 96,654 | $ 263,073 | $ 116,191 |
Adjustments to reconcile net income to cash provided (used) by operating activities: | |||
Depreciation and amortization | 30,760 | 31,035 | 33,628 |
Stock-based compensation | 23,844 | 14,894 | 13,021 |
Provision for doubtful accounts | 5,988 | 6,484 | 4,571 |
Deferred income taxes | (4,174) | 1,501 | 36,490 |
Non-cash impairment of intangible asset | 32,636 | 0 | 0 |
Other | 2,442 | 3,790 | 905 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 24,971 | (17,743) | (36,389) |
Inventories | 9,682 | (45,757) | 22,069 |
Due from former parent | 548,301 | (326,075) | (14,523) |
Accounts payable | 31,923 | (37,598) | 4,147 |
Income taxes | 4,033 | 6,328 | (3,308) |
Accrued liabilities | 23,273 | 53,071 | 5,612 |
Due to former parent | (16,065) | (22,524) | (20,296) |
Other assets and liabilities | (36,480) | (26,782) | 6,483 |
Cash provided (used) by operating activities | 777,788 | (96,303) | 168,601 |
INVESTING ACTIVITIES | |||
Capital expenditures | (22,679) | (21,038) | (25,584) |
Software purchases | (14,807) | (1,663) | (879) |
Amounts advanced for notes receivable from former parent | 0 | 0 | (29,800) |
Collection of notes receivable from former parent | 517,940 | 29,800 | 0 |
Other | 3,493 | 4,230 | (1,354) |
Cash provided (used) by investing activities | 483,947 | 11,329 | (57,617) |
FINANCING ACTIVITIES | |||
Proceeds from issuance of long-term debt | 1,050,000 | 0 | 0 |
Payment of debt issuance costs | (12,993) | 0 | 0 |
Principal payments of long-term debt | (127,000) | 0 | 0 |
Repayment of notes payable to former parent | (269,112) | 0 | 0 |
Net transfers (to) from former parent | (1,814,682) | 107,246 | (119,563) |
Dividends paid | (63,555) | 0 | 0 |
Proceeds from issuance of Common Stock, net of shares withheld for taxes | 1,035 | 0 | 0 |
Net decrease in short-term borrowings | (4,911) | (915) | (256) |
Net decrease in short-term borrowings | (10,876) | 0 | 0 |
Cash (used) provided by financing activities | (1,252,094) | 106,331 | (119,819) |
Effect of foreign currency rate changes on cash and cash equivalents | 391 | (5,392) | 2,798 |
Net change in cash and cash equivalents | 10,032 | 15,965 | (6,037) |
Cash, cash equivalents and restricted cash — beginning of year | 96,776 | 80,811 | 86,848 |
Cash, cash equivalents and restricted cash — end of year | 106,808 | 96,776 | 80,811 |
Interest paid | 29,407 | 6,618 | 6,455 |
Income taxes paid | 28,886 | 180 | 1,723 |
Change in accrual for property, plant and equipment | 4,854 | 580 | 797 |
Change in accrual for computer software | $ 5,352 | $ 602 | $ 1,687 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Former Parent Investment | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2016 | 0 | |||||
Beginning balance at Dec. 31, 2016 | $ 1,392,847 | $ 0 | $ 0 | $ 1,540,935 | $ 0 | $ (148,088) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 116,191 | 116,191 | 0 | |||
Foreign currency translation and other | 25,606 | 25,606 | ||||
Net transfers to former parent | (106,542) | (106,542) | ||||
Ending balance (in shares) at Dec. 30, 2017 | 0 | |||||
Ending balance at Dec. 30, 2017 | 1,357,893 | $ 0 | 0 | 1,480,375 | 0 | (122,482) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 263,073 | 263,073 | 0 | |||
Foreign currency translation and other | (22,700) | (22,700) | ||||
Net transfers to former parent | $ 122,139 | 122,139 | ||||
Ending balance (in shares) at Dec. 29, 2018 | 0 | 0 | ||||
Ending balance at Dec. 29, 2018 | $ 1,723,452 | $ 0 | 0 | 1,868,634 | 0 | (145,182) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 96,654 | 32,164 | 64,490 | |||
Stock-based compensation, net (in shares) | 164 | |||||
Stock-based compensation, net | 15,278 | $ 0 | 17,931 | (2,653) | ||
Foreign currency translation and other | 3,167 | 3,167 | ||||
Defined benefit pension plans | (1,243) | (1,243) | ||||
Derivative financial instruments | (4,924) | (4,924) | ||||
Net transfers to former parent | (1,696,859) | (1,765,343) | 68,484 | |||
Transfer of former parent investment to additional paid-in capital | 132,742 | (132,742) | ||||
Issuance of Common Stock (in shares) | 56,648 | |||||
Issuance of Common Stock | 0 | $ 0 | 0 | |||
Dividends on Common Stock | $ (63,555) | (63,555) | ||||
Ending balance (in shares) at Dec. 28, 2019 | 56,811,198 | 56,812 | ||||
Ending balance at Dec. 28, 2019 | $ 69,257 | $ 0 | $ 150,673 | $ 0 | $ (1,718) | $ (79,698) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity Parenthetical | 12 Months Ended |
Dec. 28, 2019$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Dividends (in USD per share) | $ 1.12 |
REVENUES
REVENUES | 12 Months Ended |
Dec. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied based on the transfer of control of promised goods or services. Performance Obligations Disclosure is required for the aggregate transaction price allocated to performance obligations that are unsatisfied at the end of a reporting period, unless the optional practical expedients are applicable. The Company elected the practical expedients that do not require disclosure of the transaction price allocated to remaining performance obligations for (i) variable consideration related to sales-based royalty arrangements and (ii) contracts with an original expected duration of one year or less. As of December 2019 , there were no arrangements with transaction price allocated to remaining performance obligations other than (i) contracts for which the Company has applied the practical expedients discussed above and (ii) fixed consideration related to future minimum guarantees. For the year ended December 2019 , revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material. Contract Balances Accounts receivable represent the Company's unconditional right to receive consideration from a customer and are recorded at net invoiced amounts, less estimated allowances. Contract assets are rights to consideration in exchange for goods or services that have been transferred to a customer when that right is conditional on something other than the passage of time. Once the Company has an unconditional right to consideration under a contract, amounts are invoiced and contract assets are reclassified to "accounts receivable." The Company's primary contract assets relate to sales-based royalty arrangements. Contract liabilities are recorded when a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional, before the transfer of a good or service to the customer, and thus represent the Company's obligation to transfer the good or service to the customer at a future date. The Company's primary contract liabilities relate to gift cards, loyalty programs and sales-based royalty arrangements. The following table presents information about contract balances recorded in the Company's balance sheets: (In thousands) December 2019 December 2018 Accounts receivable, net $ 228,459 $ 252,966 Contract assets (a) 10,679 2,841 Contract liabilities (b) 1,775 2,311 (a) Included within "prepaid expenses and other current assets" in the Company's balance sheets. (b) Included within "accrued liabilities" in the Company's balance sheets. The Company recognized revenue of $1.9 million in 2019 that was included in contract liabilities as of December 2018 , and $1.7 million in 2018 that was included in contract liabilities as of December 2017 . The changes in the contract asset and contract liability balances primarily result from timing differences between the Company's satisfaction of performance obligations and the customer's payment. Disaggregation of Revenue The following tables present revenues disaggregated by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues are affected by economic factors. Revenues from licensing arrangements have been included within the U.S. or Non-U.S. Wholesale channels, based on the respective region covered by the agreement. Branded Direct-to-Consumer revenues include the distribution of our products via concession retail locations internationally, Wrangler ® and Lee ® branded full-price stores globally and Company-owned outlet stores globally. The Branded Direct-to-Consumer channel also includes sales of our branded products in U.S.-based VF Outlet ™ stores and digital sales via www.wrangler.com and www.lee.com. The Other channel includes sales of third-party branded merchandise at VF Outlet™ stores and sales of products manufactured for third-parties. Sales of Wrangler ® and Lee ® branded products at VF Outlet™ stores are not included in Other and are reported in the Branded Direct-to-Consumer channel discussed above. The Other channel also includes transactions with VF for pre-Separation activities, none of which will continue going forward. These transactions include sales of VF-branded products at VF Outlet™ stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018. Year Ended December 2019 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,198,303 $ 391,887 $ 22,137 $ 1,612,327 Non-U.S. Wholesale 213,905 314,882 1,585 530,372 Branded Direct-To-Consumer 105,904 175,507 27 281,438 Other — — 124,702 124,702 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 Geographic revenues U.S. $ 1,282,428 $ 481,050 $ 146,469 $ 1,909,947 International 235,684 401,226 1,982 638,892 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 Year Ended December 2018 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,224,218 $ 420,244 $ 30,100 $ 1,674,562 Non-U.S. Wholesale 263,675 357,471 — 621,146 Branded Direct-To-Consumer 114,313 182,528 — 296,841 Other — — 171,449 171,449 Total $ 1,602,206 $ 960,243 $ 201,549 $ 2,763,998 Geographic revenues U.S. $ 1,303,948 $ 509,160 $ 201,549 $ 2,014,657 International 298,258 451,083 — 749,341 Total $ 1,602,206 $ 960,243 $ 201,549 $ 2,763,998 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Kontoor Brands, Inc. ("Kontoor," the "Company," "we," "us" or "our") is a global lifestyle apparel company headquartered in the United States ("U.S."). The Company designs, produces, procures, markets and distributes apparel primarily under the brand names Wrangler ® and Lee ® . The Company's products are sold in the U.S. through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores and online. The Company's products are also sold internationally, primarily in Europe and Asia, through department, specialty, company-operated, concession retail and independently operated partnership stores and online. VF Outlet ™ stores carry Wrangler ® and Lee ® branded products, as well as merchandise that is specifically purchased for sale in these stores. Spin-Off Transaction On May 22, 2019, VF Corporation ("VF" or "former parent") completed the spin-off of its Jeanswear business, which included the Wrangler ® , Lee ® and Rock & Republic ® brands, as well as the VF Outlet TM business. The spin-off transaction (the "Separation") was effected through a pro-rata distribution to VF shareholders of one share of Kontoor common stock for every seven shares of VF common stock held on the record date of May 10, 2019. Kontoor began to trade as a standalone public company (NYSE: KTB) on May 23, 2019. On May 17, 2019, the Company incurred $1.05 billion of indebtedness under a newly structured third-party debt issuance, the proceeds of which were used primarily to finance a cash transfer to VF in connection with the Separation. The Company entered into several agreements with VF that govern the relationship of the parties following the Separation, including the Separation and Distribution Agreement, the Tax Matters Agreement, the Transition Services Agreement, the Kontoor Intellectual Property License Agreement, the VF Intellectual Property License Agreement and the Employee Matters Agreement. Under the terms of the Transition Services Agreement, the Company and VF agreed to provide each other certain transitional services including information technology, information management, human resources, employee benefits administration, supply chain, facilities, and other limited finance and accounting-related services for periods up to 18 months, which may be extended subject to the mutual agreement of both parties. The Company also entered into certain commercial arrangements with VF. Revenues, expenses and operating expense reimbursements under these agreements are recorded within the reportable segments or within the "corporate and other expenses" line item in the reconciliation of segment profit in Note 3 to the Company's financial statements, based on the nature of the arrangements. Fiscal Year The Company operates and reports using a 52/53 week fiscal year ending on the Saturday closest to December 31 of each year. For presentation purposes herein, all references to periods ended December 2019 , December 2018 and December 2017 correspond to the 52-week fiscal years ended December 28, 2019 , December 29, 2018 and December 30, 2017 , respectively. Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements for periods through the Separation date of May 22, 2019 were combined financial statements prepared on a "carve-out" basis as discussed below. The Company’s financial statements for the period from May 23, 2019 through December 28, 2019 were consolidated financial statements based on the reported results of Kontoor Brands, Inc. as a standalone company. The consolidated and combined financial statements and related disclosures are presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"). The Company’s consolidated and combined financial statements for all periods presented are referred to throughout this Annual Report on Form 10-K as “financial statements.” Basis of Presentation - Prior to the Separation Through the Separation date, the Company's combined financial statements were prepared on a carve-out basis under GAAP. These accompanying combined financial statements reflected the historical financial position, results of operations and cash flows of the Company for the periods presented, through the Separation date, as historically managed within VF. The combined financial statements were derived from the consolidated financial statements and accounting records of VF. The combined statements of income included costs for certain centralized functions and programs provided and administered by VF that were charged directly to the Company. These centralized functions and programs included, but were not limited to, information technology, human resources, accounting shared services, supply chain and insurance. In addition, for purposes of preparing these combined financial statements on a carve-out basis, a portion of VF's total corporate expenses were allocated to the Company. These expense allocations included the cost of corporate functions and resources provided by or administered by VF including, but not limited to, executive management, finance, accounting, legal, human resources and related benefit costs associated with such functions, such as stock-based compensation and pension. Allocations also included the cost of operating VF's corporate headquarters located in Greensboro, North Carolina. Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional revenues, cost of goods sold or square footage, as applicable. Management considered the basis on which the expenses were allocated to reasonably reflect the utilization of services provided to, or benefit received by, the Company during the periods presented. However, the allocations may not reflect the expenses that would have been incurred if the Company had been a standalone company for the periods presented. The combined financial statements included certain assets and liabilities that were historically held at the VF corporate level but were specifically identifiable or otherwise attributable to the Company. VF's third-party long-term debt and the related interest expense were not allocated to the Company for any of the periods presented as the Company was not the legal obligor of such debt. All intracompany transactions were eliminated. All transactions between the Company and VF were included in these financial statements. For those transactions between the Company and VF that were historically settled in cash, the Company reflected such balances in the balance sheets within "due from former parent" or "due to former parent." The aggregate net effect of transactions between the Company and VF that were not historically settled in cash were reflected in the balance sheets within "former parent investment" and in the statements of cash flows within "net transfers to former parent." Subsequent to the Separation, the Company continued to service commercial arrangements with VF, which included sales of VF-branded products at VF Outlet ™ stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018, none of which will continue in 2020. Income Taxes — Prior to the Separation, the Company's operations were included in VF’s U.S. federal consolidated and certain state income tax returns and certain foreign tax returns. For periods prior to the Separation, the income tax expense and deferred tax balances presented in the financial statements were calculated on a carve-out basis, which applied accounting guidance as if the Company filed its own tax returns in each jurisdiction and included tax losses and tax credits that may not reflect tax positions taken by VF. Certain tax attributes reported by the Company on a carve-out basis were not transferred to the Company as part of the Separation. These attributes primarily related to losses in certain Central America and South America ("CASA") jurisdictions. Use of Estimates In preparing the financial statements in accordance with GAAP, management makes estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Foreign Currency Translation and Transactions The financial statements of most foreign subsidiaries are measured using the foreign currency as the functional currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using exchange rates in effect at the balance sheet dates, and revenues and expenses are translated at average exchange rates during the period. Resulting translation gains and losses are reported in other comprehensive income (loss) (“OCI”). The Company accounted for Argentina as highly inflationary from July 1, 2018 through the Separation as the projected three-year cumulative inflation rate exceeded 100%. At the Separation, the Company transitioned the Argentina market to a licensed model, which transacts in U.S dollars. Foreign currency transactions are denominated in a currency other than the functional currency of a particular subsidiary. These transactions typically result in receivables or payables that are denominated in the foreign currency. Transaction gains or losses arise when exchange rate fluctuations either increase or decrease the functional currency cash flows from the settlement of the originally recorded transactions. As discussed in Note 14 to the Company's financial statements, the Company enters into contracts to manage foreign currency risk on certain of these transactions. Foreign currency transaction gains and losses reported in the statements of income, net of the related hedging gains and losses, were a gain of $5.6 million in 2019 and losses of $3.4 million and $0.8 million in 2018 and 2017 , respectively. Cash and Equivalents Cash and equivalents are demand deposits, receivables from third-party credit card processors, and highly liquid investments that mature within three months of their purchase dates. Cash equivalents totaling $30.5 million and $24.2 million at December 2019 and 2018 , respectively, consist of money market funds and short-term time deposits. Accounts Receivable, Net of Allowance for Doubtful Accounts Trade accounts receivable are recorded at invoiced amounts, less contractual allowances for trade terms, sales incentive programs and discounts. Royalty receivables are recorded at amounts earned based on the licensees’ sales of licensed products, subject in some cases to contractual minimum royalties due from individual licensees. The Company maintains an allowance for doubtful accounts for estimated losses that will result from the inability of customers and licensees to make required payments. The allowance is determined based on review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables considering the aging of balances, historical and anticipated trends, and current economic conditions. All accounts are subject to ongoing review of ultimate collectability. Receivables are written off against the allowance when it is probable the amounts will not be recovered. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method. Existence of physical inventory is verified through periodic physical inventory counts and ongoing cycle counts at most locations throughout the year. Property, Plant and Equipment Property, plant and equipment is initially recorded at cost. The Company capitalizes improvements to property, plant and equipment that substantially extend the useful life of an asset, and interest cost incurred during construction of major assets. Depreciation is computed using the straight-line method over each asset's estimated useful life, ranging from three to ten years for machinery and equipment and up to 40 years for buildings. Amortization expense for leasehold improvements is recognized over the shorter of the estimated useful life or lease term and is included in depreciation and amortization expense. Repair and maintenance costs are expensed as incurred. Computer Software Expenditures for major software purchases and software developed for internal use are capitalized and amortized on a straight-line basis over a five to ten-year period. The Company's policy provides for the capitalization of external direct costs associated with developing or obtaining internal use computer software. Capitalized computer software costs are included in the balance sheet within "other assets." Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred. During 2019, the Company capitalized $27.1 million related to our recently initiated implementation of a global enterprise resource planning (ERP) system, of which $23.6 million is reflected in "other assets" and $3.5 million is reflected in "property, plant and equipment, net" at December 2019. Intangible Assets Intangible assets include trademarks, trade names and customer relationships. Trademark intangible assets represent individual acquired trademarks, some of which are registered in multiple countries. Customer relationship intangible assets are based on the value of relationships with wholesale customers in place at the time of acquisition. Intangible assets determined to have indefinite lives, consisting of major trademarks and trade names, are not amortized. Other intangible assets include customer relationships and trademarks determined to have a finite life, and are amortized over their estimated useful lives ranging from 15 to 16 years. Amortization of other intangible assets is computed using straight-line or accelerated methods consistent with the timing of the expected benefits to be received. Depreciation and amortization expense related to producing or otherwise obtaining finished goods inventories is reflected in the Company's income statement within "cost of goods sold" and all other depreciation and amortization expense is reflected within "selling, general and administrative expenses." Impairment of Long-lived Assets, Including Goodwill and Intangibles Property, Plant and Equipment and Finite-lived Intangible Assets — The Company’s policy is to review property, plant and equipment and amortizable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. If forecasted undiscounted cash flows to be generated by an asset are not expected to recover the asset’s carrying value, the estimated fair value is calculated, and an impairment charge is recorded to the extent that an asset’s carrying value exceeds its estimated fair value. Goodwill and Indefinite-lived Intangible Assets — The Company’s policy is to evaluate goodwill and indefinite-lived intangible assets for possible impairment as of the beginning of the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying value. The Company may first assess qualitative factors as a basis for determining whether it is necessary to perform quantitative impairment testing. If the Company determines that it is not more likely than not that the fair value of an asset or reporting unit is less than its carrying value, then no further testing is required. Otherwise, the assets must be quantitatively tested for possible impairment. An indefinite-lived intangible asset is quantitatively tested for possible impairment by comparing the estimated fair value of the asset with its carrying value. An impairment charge is recorded to the extent that the carrying value of the asset exceeds its estimated fair value. Goodwill is quantitatively tested for possible impairment by comparing the estimated fair value of a reporting unit with its carrying value, including the goodwill assigned to that reporting unit. An impairment charge is recorded to the extent that the carrying value of the reporting unit exceeds its estimated fair value. Leases and Rent Expense The Company enters into operating leases for offices, operational facilities, retail locations, vehicles and other assets that expire at various dates through 2031. Leases for real estate typically have initial terms ranging from 2 to 15 years, generally with renewal options. Leases for equipment typically have initial terms ranging from 3 to 7 years. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes and occupancy-related costs. Contingent rent is owed when sales at individual retail store locations exceed a stated base amount, and is recognized when the liability is probable. Rent expense for leases having rent abatements, landlord incentives or scheduled rent fluctuations is recorded on a straight-line basis over the lease term beginning on the lease commencement date, which is the date the underlying asset is made available to the Company. Lease terms may include optional renewals, terminations or purchases, which are considered in the Company’s assessments when such options are reasonably certain to be exercised. For retail real estate leases, the Company does not typically include renewal options in the underlying lease term. For non-retail real estate leases, when renewal options are reasonably certain to be exercised, the Company includes the renewal options in the underlying lease term, up to a maximum of ten years . Renewals for all other leases are determined on a lease-by-lease basis. Upon adoption of Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842),” the Company elected the package of practical expedients permitted under the new lease standard, which allowed the Company to carry forward its historical assessment of whether a contract contained a lease, how the lease was classified, and if initial direct costs could be capitalized. The Company elected to combine non-lease components with the related lease components for real estate, vehicles and other significant asset arrangements and aggregate the combined items as a single lease component for accounting purposes. For leases with a lease term of 12 months or less for all classes of underlying assets, the Company elected not to recognize a right-of-use asset and related lease liability. Certain of the Company’s leases contain fixed, indexed, or market-based escalation clauses which impact future payments. Certain arrangements contain variable payment provisions, such as payments based on sales volumes or amounts and mileage, or excess mileage. The Company’s leases typically contain customary covenants and restrictions. The Company determines whether a contract is a lease at inception. This typically requires more judgment in storage and service arrangements where the Company must determine whether its rights to specific physical or production capacity may represent substantially all of the available capacity. The Company measures right-of-use assets and related lease liabilities based on the present value of remaining lease payments, including in-substance fixed payments, the current payment amount when payments depend on an index or rate (e.g., inflation adjustments, market renewals), and the amount the Company believes is probable to be paid to the lessor under residual value guarantees, when applicable. Lease contracts may include fixed payments for non-lease components, such as maintenance, which are included in the measurement of lease liabilities for certain asset classes based on the Company’s election to combine lease and non-lease components. As applicable borrowing rates are not typically implied within our lease arrangements, the Company discounts lease payments based on its estimated incremental borrowing rate at lease commencement, or modification, which is based on the Company’s estimated credit rating, the lease term at commencement and the contract currency of the lease arrangement. Revenue Recognition The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied based on the transfer of control of promised goods or services. The transfer of control typically occurs at a point in time based on consideration of when the customer has i) an obligation to pay for, ii) physical possession of, iii) legal title to, iv) risks and rewards of ownership of and v) accepted the goods or services. The timing of revenue recognition within the wholesale channels occurs either on shipment or delivery of goods based on contractual terms with the customer. The timing of revenue recognition in the direct-to-consumer channels typically occurs at the point of sale within Company-operated or concession retail stores and either on shipment or delivery of goods for e-commerce transactions based on contractual terms with the customer. For finished products shipped directly to customers from our suppliers, the Company’s promise to the customer is a performance obligation to provide the specified goods and the Company has discretion in establishing pricing. Thus, the Company is the principal in the arrangement and revenue is recognized on a gross basis at the transaction price. The duration of contractual arrangements with customers in our wholesale channels is typically less than one year. Payment terms with customers are typically between 30 and 60 days. The Company does not adjust the promised amount of consideration for the effects of a significant financing component as it is expected, at contract inception, that the period between the transfer of the promised good or service to the customer and the customer payment for the good or service will be one year or less. The amount of revenue recognized reflects the expected consideration to be received for providing the goods or services to the customer, which includes estimates for variable consideration. Variable consideration includes allowances for trade terms, sales incentive programs, discounts, markdowns, chargebacks and product returns. Estimates of variable consideration are determined at contract inception and reassessed at each reporting date, at a minimum, to reflect any changes in facts and circumstances. The Company utilizes the expected value method in determining its estimates of variable consideration, based on evaluations of specific product and customer circumstances, historical and anticipated trends, and current economic conditions. Revenue from the sale of gift cards is deferred and recorded as a contract liability until the gift card is redeemed by the customer, factoring in breakage as appropriate, which considers whether the Company has a legal obligation to remit the value of the unredeemed gift card to any jurisdiction under unclaimed property regulations. The VF Outlet™ stores maintain customer loyalty programs where customers earn rewards from qualifying purchases, which are redeemable for discounts on future purchases or other rewards. The Company estimates the standalone selling price of the loyalty rewards and allocates a portion of the consideration for the sale of products to the loyalty points earned. The deferred amount is recorded as a contract liability, and is recognized as revenue when the points are redeemed or when the likelihood of redemption is remote. The Company has elected to treat all shipping and handling activities as fulfillment costs and recognize the costs as selling, general and administrative expenses at the time the related revenue is recognized. Shipping and handling costs billed to customers are included in net revenues. Sales taxes and value added taxes collected from customers and remitted directly to governmental authorities are excluded from the transaction price. The Company has licensing agreements for its symbolic intellectual property, most of which include minimum guaranteed royalties. Royalty income is recognized as earned over the respective license term based on the greater of minimum guarantees or the licensees’ sales of licensed products at rates specified in the licensing contracts. Royalty income related to the minimum guarantees is recognized using a measure of progress with variable amounts recognized only when the cumulative earned royalty exceeds the minimum guarantees. As of December 2019 , the Company expects to recognize $27.8 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time through December 2024 . The variable consideration is not disclosed as a remaining performance obligation as the licensing arrangements qualify for the sales-based royalty exemption. Royalty income was included in net revenues in the statements of income and was $32.1 million , $32.7 million and $30.5 million in 2019, 2018 and 2017, respectively. The Company has applied the practical expedient to recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. Cost of Goods Sold Cost of goods sold for Company-manufactured goods includes all materials, labor and overhead costs incurred in the production process. Cost of goods sold for purchased finished goods includes the purchase costs and related overhead. In both cases, overhead includes all costs related to manufacturing or purchasing finished goods, including costs of planning, purchasing, quality control, depreciation, freight, duties, royalties paid to third parties and shrinkage. Cost of goods sold also includes restructuring charges. Selling, General and Administrative Expenses Selling, general and administrative expenses include costs of product development, selling, marketing and advertising, Company-operated retail stores, concession retail stores, warehousing, distribution, shipping and handling, licensing and administration. Selling, general and administrative expenses also include restructuring charges and the service cost component of net periodic pension costs related to these functions, along with the non-service components of net periodic pension costs (including settlement and curtailment losses). Advertising costs are expensed as incurred and totaled $119.3 million in 2019 , $127.8 million in 2018 and $137.3 million in 2017 . Advertising costs include cooperative advertising payments made to the Company's customers as reimbursement for their costs of advertising the Company’s products, and totaled $5.9 million in 2019 , $7.2 million in 2018 and $9.4 million in 2017 . Shipping and handling costs for delivery of products to customers totaled $66.1 million in 2019 , $59.7 million in 2018 and $56.4 million in 2017 . Expenses related to royalty income were $1.8 million in 2019 , $1.3 million in 2018 and $1.8 million in 2017 . Derivative Financial Instruments Derivative financial instruments are measured at fair value in the Company's balance sheet. Unrealized gains and losses are recognized as assets and liabilities, respectively, and classified as current or noncurrent based on the derivatives’ maturity dates. The accounting for changes in the fair value of derivative instruments (i.e., gains and losses) depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. To qualify for hedge accounting treatment, all hedging relationships must be formally documented at the inception of the hedges and must be highly effective in offsetting changes in future cash flows of hedged transactions. Further, at the inception of a contract and on an ongoing basis, the Company assesses whether the hedging instruments are effective in offsetting the risk of the hedged transactions. Occasionally, a portion of a derivative instrument will be considered ineffective in hedging the originally identified exposure due to a decline in amount or a change in timing of the hedged exposure. In such cases, hedge accounting treatment is discontinued for the ineffective portion of that hedging instrument, and any change in fair value for the ineffective portion is recognized in net income. The Company does not use derivative instruments for trading or speculative purposes. Hedging cash flows are classified in the Company's statements of cash flows in the same category as the items being hedged. Hedging contracts are further described in Note 14 to the Company's financial statements. Cash Flow Hedges — The Company uses foreign currency exchange contracts primarily to hedge a portion of the exchange risk for its forecasted sales, purchases, intercompany service fees and royalties. The Company uses interest rate swap agreements to partially hedge the interest rate risk associated with the volatility of monthly LIBOR rate movements. Derivative Contracts Not Designated as Hedges — The Company uses derivative contracts to manage foreign currency exchange risk on accounts receivable and accounts payable. These contracts are not designated as hedges and are recorded at fair value in the Company's balance sheets. Changes in the fair values of these instruments are recognized directly in earnings. Gains or losses on these contracts largely offset the net transaction gains or losses on the related assets and liabilities. The counterparties to our derivative contracts are financial institutions with investment grade credit ratings, but this does not eliminate the Company's exposure to credit risk with these institutions. To manage its credit risk, the Company continually monitors the credit risks of its counterparties, limits its exposure in the aggregate and to any single counterparty, and adjusts its hedging positions as appropriate. The impact of the Company's credit risk and the credit risk of its counterparties, as well as the ability of each party to fulfill its obligations under the contracts, is considered in determining the fair value of the derivative contracts. Credit risk has not had a significant effect on the fair value of our derivative contracts. The counterparties to our derivative contracts are also lenders under our credit facility. These derivative contracts are secured by the same collateral that secures our credit facility. Self-insurance The Company is self-insured for a significant portion of its employee medical, workers’ compensation, property and general liability exposures. Liabilities for self-insured exposures are accrued at the present value of amounts expected to be paid based on historical claims experience and actuarial data for forecasted settlements of claims filed and for incurred but not yet reported claims. Accruals for self-insured exposures are included in current and noncurrent liabilities based on the expected periods of payment. Excess liability insurance has been purchased to limit the amount of self-insured risk on claims. Income Taxes Income taxes are provided on pre-tax income for financial reporting purposes. Deferred income tax assets and liabilities, as presented in the Company's balance sheets, reflect the net future tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Net temporary differences and net operating losses are recorded utilizing tax rates currently enacted for the years in which the differences are expected to be settled or realized. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits and changes in estimates and judgments used. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not (likelihood of more than 50%) that some portion, or all, of a deferred tax asset will not be realized. Accrued income taxes as presented in the Company's balance sheets include unrecognized income tax benefits along with related interest and penalties, appropriately classified as current or noncurrent. All deferred tax assets and liabilities are classified as noncurrent in |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Dec. 28, 2019 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The chief operating decision maker allocates resources and assesses performance based on a global brand view which determines the Company's operating segments. Operating segments are the basis for the Company's reportable segments, as described below: • Wrangler — Wrangler ® branded denim, apparel and accessories. • Lee — Lee ® branded denim, apparel and accessories. In addition, we report an "Other" category in order to reconcile segment revenues and segment profit to the Company's operating results, but the Other category is not considered a reportable segment based on evaluation of aggregation criteria. Other includes sales of third-party branded merchandise at VF Outlet ™ stores, sales and licensing of Rock & Republic ® branded apparel, and sales of products manufactured for third-parties. Sales of Wrangler ® and Lee ® branded products at VF Outlet ™ stores are not included in Other and are reported in the respective segments discussed above. The Other category also includes transactions with VF for pre-Separation activities, none of which will continue going forward. These transactions include sales of VF-branded products at VF Outlet ™ stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018. Accounting policies utilized for internal management reporting at the individual segments are consistent with those included in Note 1 to the Company's financial statements, except as noted below. Through the Separation date, the Company's statements of income included costs for certain centralized functions and programs provided and administered by VF that were charged directly to VF's businesses, including the Company. These centralized functions and programs included, but were not limited to, information technology, human resources, accounting shared services, supply chain, insurance and the related benefits. These historical allocations were included in the measurement of segment profit below. In addition, for purposes of preparing these financial statements on a carve-out basis, a portion of VF's total corporate expenses were allocated to the Company. These expense allocations included the cost of corporate functions and resources provided by or administered by VF including, but not limited to, executive management, finance, accounting, legal, human resources and related benefit costs associated with such functions. Allocations also included the cost of operating VF's corporate headquarters located in Greensboro, North Carolina. These additional allocations were reported as "corporate and other expenses" in the table below. After the Separation, as a standalone public company, the Company has allocated costs for certain centralized functions and programs to the Lee ® and Wrangler ® segments based on appropriate metrics such as usage or production of net revenues. These centralized functions and programs include, but are not limited to, information technology, human resources, supply chain, insurance and related benefit costs associated with such functions. Corporate and other expenses, impairment charges, and interest income and expense are not controlled by segment management and therefore are excluded from the measurement of segment profit. The following table presents financial information for the Company's reportable segments and income before income taxes: Year Ended December (In thousands) 2019 2018 2017 Segment revenues: Wrangler $ 1,518,112 $ 1,602,206 $ 1,619,252 Lee 882,276 960,243 1,005,774 Total reportable segment revenues 2,400,388 2,562,449 2,625,026 Other revenues 148,451 201,549 205,080 Total net revenues $ 2,548,839 $ 2,763,998 $ 2,830,106 Segment profit: Wrangler $ 215,008 $ 265,981 $ 280,257 Lee 68,214 92,756 107,246 Total reportable segment profit $ 283,222 $ 358,737 $ 387,503 Non-cash impairment of intangible asset (1) (32,636 ) — — Corporate and other expenses (90,117 ) (30,916 ) (32,676 ) Interest income from former parent, net 3,762 7,738 3,372 Interest expense (35,787 ) (1,173 ) (1,263 ) Interest income 3,931 5,740 2,984 Profit (loss) related to other revenues 2,819 (48 ) (767 ) Income before income taxes $ 135,194 $ 340,078 $ 359,153 (1) Represents an impairment charge in the third quarter of 2019 related to the Rock & Republic ® trademark. See Note 7 to the Company's financial statements. Segment assets, for internal management purposes, are those used directly in or resulting from the operations of each business, which are accounts receivable and inventories. Segment assets included in the "Other" category represent balances related to the VF Outlet ™ business and other corporate activities, and are provided for purposes of reconciliation as the "Other" category is not considered a reportable segment. Total expenditures for additions to long-lived assets are not disclosed as this information is not regularly provided to the chief operating decision maker at the segment level. The following table presents assets (i.e. accounts receivable and inventories) for the Company's reportable segments and a reconciliation to total asset balances: (In thousands) December 2019 December 2018 Segment assets: Wrangler $ 378,041 $ 383,122 Lee 238,763 271,518 Total reportable segment assets 616,804 654,640 Other accounts receivable and inventories 69,756 72,138 Total segment assets $ 686,560 $ 726,778 Cash and equivalents 106,808 96,776 Due from former parent, current — 547,690 Notes receivable from former parent — 517,940 Prepaid expenses and other current assets 84,235 52,014 Due from former parent, noncurrent — 611 Property, plant, and equipment, net 132,192 138,449 Operating lease assets 86,582 — Goodwill and intangible assets 230,129 267,575 Deferred income taxes 79,551 42,891 Other assets 111,099 67,741 Total assets $ 1,517,156 $ 2,458,465 The following table presents supplemental information of net revenues by geographic area based on the location of the customer: Year Ended December (In thousands) 2019 2018 2017 Revenues: U.S. $ 1,909,947 $ 2,014,657 $ 2,046,359 International 638,892 749,341 783,747 Total $ 2,548,839 $ 2,763,998 $ 2,830,106 One customer accounted for 34% , 32% and 33% of the Company's total net revenues in 2019 , 2018 and 2017 , respectively. Sales to this customer are included in both the Wrangler and Lee reportable segments. The following table presents property, plant, and equipment by geographic location: (In thousands) December 2019 December 2018 Property, plant and equipment, net: U.S. $ 74,084 $ 80,551 International 58,108 57,898 Total $ 132,192 $ 138,449 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 28, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE (In thousands) December 2019 December 2018 Trade $ 230,588 $ 253,047 Royalty and other 9,723 10,468 Total accounts receivable 240,311 263,515 Less: allowance for doubtful accounts (11,852 ) (10,549 ) Accounts receivable, net $ 228,459 $ 252,966 Sale of Accounts Receivable On April 1, 2019, the Company entered into an agreement with a financial institution to sell selected trade accounts receivable on a recurring, nonrecourse basis. Under this agreement, up to $377.5 million of the Company’s trade accounts receivable may be sold to the financial institution and remain outstanding at any point in time. The Company removes the sold balances from "accounts receivable" in its balance sheet at the time of sale. The Company does not retain any interests in the sold accounts receivable but continues to service and collect outstanding accounts receivable on behalf of the financial institution. Prior to April 1, 2019, the Company had a separate agreement with VF, pursuant to which the Company’s trade accounts receivable were sold as part of VF’s agreement with a financial institution. Under this agreement, the Company did not retain any interests in the sold accounts receivable but continued to service and collect outstanding accounts receivable on behalf of VF. Prior to the Separation, the amount due from VF for these sales was separately reflected in the Company's balance sheet within "due from former parent." Refer to Note 22 to the Company's financial statements for additional information. During 2019 , 2018 and 2017 , the Company sold total trade accounts receivable of $1,035.4 million , $1,057.0 million and $1,101.1 million, respectively. As of December 2019 , $188.1 million of the sold trade accounts receivable had been removed from the Company's balance sheet but remained outstanding with the financial institution. As of December 2018 , $ 544.9 million of the sold trade accounts receivable had been removed from "accounts receivable" and reflected in the Company's balance sheet within "due from former parent." The funding fees charged by the financial institution for these programs are reflected in the Company's statements of income within "other expense, net" and were $5.3 million , $5.1 million and $3.6 million in 2019 , 2018 and 2017 , respectively. Net proceeds of these programs are reflected as operating activities in the Company's statements of cash flows. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 28, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES (In thousands) December 2019 December 2018 Finished products $ 383,643 $ 396,345 Work-in-process 34,783 37,466 Raw materials 39,675 40,001 Total inventories $ 458,101 $ 473,812 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT (In thousands) December 2019 December 2018 Land and improvements $ 12,452 $ 13,279 Buildings and improvements 178,303 187,235 Machinery and equipment 402,417 415,682 Property, plant and equipment, at cost 593,172 616,196 Less: accumulated depreciation and amortization (460,980 ) (477,747 ) Property, plant and equipment, net $ 132,192 $ 138,449 Depreciation expense was $ 22.3 million, $ 23.8 million and $ 26.1 million in 2019 , 2018 and 2017 , respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2019 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 46,058 $ 12,074 Customer relationships 15 years Accelerated 10,627 9,919 708 Finite-lived intangible assets, net 12,782 Indefinite-lived intangible assets: Trademarks and trade names 4,511 Intangible assets, net $ 17,293 (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2018 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 10,900 $ 47,232 Customer relationships 15 years Accelerated 10,743 9,530 1,213 Finite-lived intangible assets, net 48,445 Indefinite-lived intangible assets: Trademarks and trade names 4,614 Intangible assets, net $ 53,059 During the third quarter of 2019, the Company determined that the exclusive domestic wholesale distribution and licensing agreement of the Rock & Republic ® brand would not be extended. This was considered a triggering event that required management to perform a quantitative impairment analysis of the Rock & Republic ® trademark intangible asset. Based on this analysis, the Company recorded a $32.6 million non-cash impairment charge in August 2019, which was reflected within "non-cash impairment of intangible asset" in the Company's statement of income during 2019 and is included in the accumulated amortization balance at December 2019. The Company did no t incur any impairment charges during 2018 or 2017. Refer to Note 13 to the Company's financial statements for additional information on the related fair value measurements. Amortization expense (excluding impairment charges) was $3.0 million , $4.2 million and $4.2 million for 2019 , 2018 and 2017 , respectively. Estimated amortization expense for the next five years beginning in 2020 is $1.4 million , $1.2 million , $1.1 million , $1.0 million and $1.0 million , respectively. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The following table presents changes in goodwill summarized by reportable segment: (In thousands) Wrangler Lee Total Balance, December 2017 $ 135,288 $ 84,000 $ 219,288 Currency translation (2,944 ) (1,828 ) (4,772 ) Balance, December 2018 132,344 82,172 214,516 Currency translation (1,037 ) (643 ) (1,680 ) Balance, December 2019 $ 131,307 $ 81,529 $ 212,836 The Company did not record any impairment charges in 2019 , 2018 or 2017 based on the results of its annual goodwill impairment testing. Refer to Note 13 to the Company's financial statements for additional information on the related fair value measurements. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 28, 2019 | |
Other Assets [Abstract] | |
OTHER ASSETS | OTHER ASSETS The following table presents components of "other assets" as reflected in the Company's balance sheet: (In thousands) December 2019 December 2018 Investments held for deferred compensation plans (Note 12) $ 53,394 $ 34,957 Computer software, net of accumulated amortization of $3,592 in 2019 and $4,269 in 2018 29,532 3,308 Deposits 8,925 6,492 Partnership stores and shop-in-shop costs, net of accumulated amortization of $22,055 in 2019 and $23,344 in 2018 5,210 5,368 Other 14,038 17,616 Total other assets $ 111,099 $ 67,741 |
SHORT-TERM BORROWINGS AND LONG-
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | 12 Months Ended |
Dec. 28, 2019 | |
Debt Disclosure [Abstract] | |
Short-term Borrowings and Long-term Debt | SHORT-TERM BORROWINGS AND LONG-TERM DEBT Credit Facilities On May 17, 2019, the Company entered into a $1.55 billion senior secured credit facility under which it incurred $1.05 billion of indebtedness, the proceeds of which were used primarily to finance a cash transfer to VF in connection with the Separation. At inception, this facility consisted of a five-year $750.0 million term loan A facility (“Term Loan A”), a seven-year $300.0 million term loan B facility (“Term Loan B”) and a five-year $500.0 million revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders and agents party thereto. The Credit Facilities contain certain affirmative and negative covenants customary for financings of this type, including maintenance of ratios for consolidated earnings before interest, taxes, depreciation and amortization to both consolidated debt and interest expense. If the Company fails to comply with any covenants, the lenders may terminate their obligation to make advances and declare any outstanding obligations to be immediately due and payable. As of December 2019 , the Company was in compliance with all covenants. Short-term Borrowings The following table presents the components of short-term borrowings as recorded in the Company's balance sheet: (In thousands) December 2019 December 2018 Revolving Credit Facility $ — $ — International borrowing arrangements 1,070 3,215 Short-term borrowings $ 1,070 $ 3,215 The Revolving Credit Facility may be used to borrow funds in both U.S. dollar and certain non-U.S. dollar currencies, and has a $75.0 million letter of credit sublimit. The Revolving Credit Facility had $1.3 million of outstanding standby letters of credit issued on behalf of the Company as of December 2019 , leaving $498.7 million available for borrowing against this facility. The Company expects to utilize the borrowing capacity under the Revolving Credit Facility from time to time to provide working capital and funds for general corporate purposes. Borrowings under the Revolving Credit Facility are priced at a credit spread of 175 basis points over the appropriate LIBOR benchmark for each currency, or 75 basis points over the base rate for each currency, at the Company's election. The Company is also required to pay a facility fee to the lenders, currently equal to 30 basis points of the undrawn amount of the facility. The credit spread and facility fee are subject to adjustments based on the Company's credit ratings. At December 2019 and 2018 , the Company had $47.8 million and $35.9 million , respectively, of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either the Company or the banks. Total outstanding balances under these arrangements were $1.1 million and $3.2 million at December 2019 and 2018 , respectively, all of which were letters of credit and non-interest bearing to the Company. Long-term Debt The following table presents the components of long-term debt as recorded in the Company's balance sheet: (In thousands) December 2019 Term Loan A $ 695,111 Term Loan B 218,158 Total long-term debt 913,269 Less: current portion — Long-term debt, due beyond one year $ 913,269 The interest rate per annum applicable to Term Loan A is either 75 basis points over the base rate or 175 basis points over the applicable LIBOR benchmark, at the Company's election. Additionally, the interest rate per annum applicable to Term Loan B is either a base rate plus a margin of 3.25% or LIBOR plus a margin of 4.25% , at the Company's election. The LIBOR rate for both loans is subject to a "floor" of 0% . Interest payments are due quarterly on both Term Loan A and Term Loan B. Term Loan A had an outstanding principal amount of $700.0 million at December 2019 and is recorded net of unamortized debt issuance costs. During 2019, interest expense on this facility was recorded at an effective annual interest rate of 3.7% , including the amortization of debt issuance costs and the impact of the Company’s interest rate swap agreements. Term Loan B had an outstanding principal amount of $223.0 million at December 2019 and is recorded net of unamortized original issue discount and debt issuance costs. During 2019, interest expense on this facility was recorded at an effective annual interest rate of 6.4% , including the amortization of original issue discount, debt issuance costs and the impact of the Company’s interest rate swap agreements. During 2019, the Company made $50.0 million and $77.0 million of principal payments related to Term Loan A and Term Loan B, respectively, including optional repayments. As a result of optional repayments during 2019, the Company is not required to make mandatory principal payments on long-term debt until June 2021 . The following table presents scheduled payments of long-term debt as of December 2019 for the next five years and thereafter: (In thousands) Future Principal Payments 2020 $ — 2021 25,000 2022 37,500 2023 37,500 2024 600,000 Thereafter 223,000 923,000 Less: unamortized debt discount (2,050 ) Less: unamortized debt issuance costs (7,681 ) Total long-term debt 913,269 Less: current portion — Long-term debt, due beyond one year $ 913,269 |
ACCRUED AND OTHER LIABILITIES
ACCRUED AND OTHER LIABILITIES | 12 Months Ended |
Dec. 28, 2019 | |
Accrued Liabilities [Abstract] | |
ACCRUED AND OTHER LIABILITIES | ACCRUED LIABILITIES AND OTHER LIABILITIES The following table presents components of "accrued liabilities" as reflected in the Company's balance sheet: (In thousands) December 2019 December 2018 Customer discounts, allowances, and incentives $ 60,060 $ 45,220 Compensation 36,315 44,427 Other taxes 22,995 21,651 Professional services 14,005 5,069 Advertising 10,285 7,740 Customer deposits 9,273 10,106 Current income taxes payable 7,513 168 Deferred compensation (Note 12) 6,528 11,709 Insurance 2,789 4,192 Restructuring (Note 21) 2,172 21,169 Contract liabilities (Note 2) 1,775 2,311 Interest payable to former parent — 4,280 Other 21,034 16,186 Accrued liabilities $ 194,744 $ 194,228 The following table presents components of "other liabilities" as reflected in the Company's balance sheet: (In thousands) December 2019 December 2018 Deferred compensation (Note 12) $ 53,601 $ 34,957 Noncurrent income taxes payable 17,678 58,854 Pension liabilities (Note 12) 13,224 — Insurance 875 4,751 Restructuring (Note 21) — 2,080 Other 13,497 14,868 Other liabilities $ 98,875 $ 115,510 |
RETIREMENT AND SAVINGS BENEFIT
RETIREMENT AND SAVINGS BENEFIT PLANS | 12 Months Ended |
Dec. 28, 2019 | |
Retirement Benefits [Abstract] | |
RETIREMENT AND SAVINGS BENEFIT PLANS | RETIREMENT AND SAVINGS BENEFIT PLANS Pension Plans — Pre-Separation Prior to the Separation, certain Company employees participated in U.S. and international defined benefit pension plans sponsored by VF (the "Shared Plans"), which included participants of other VF operations. The Company accounted for its participation in the Shared Plans as a multi-employer benefit plan. Accordingly, net pension costs specifically related to Company employees were reflected in the Company's statements of income and the Company did not record an asset or liability in relation to the funded or unfunded status of the Shared Plans. Prior to 2018, VF used a December 31 measurement date for the Shared Plans. Due to the change in VF’s fiscal year-end, VF changed the measurement date for all plans to March 31. Additionally, VF obtained interim remeasurements due to the curtailment and settlement transactions described further below. The following table presents net pension costs recognized by the Company related to the Shared Plans through the Separation date: Year Ended December (In thousands) 2019 2018 2017 Service cost $ 726 $ 6,629 $ 6,929 Non-service components (3,166 ) (5,059 ) (181 ) Curtailment losses — 3,502 — Settlement losses — 1,188 — Net pension (benefit) costs $ (2,440 ) $ 6,260 $ 6,748 All components of net pension (benefit) costs were recorded in the Company's statements of income within "selling, general and administrative expenses" for all periods presented. During 2018 , VF approved a freeze of all future benefit accruals under the U.S. Shared Plans, effective December 31, 2018. Accordingly, the Company recognized a $3.5 million pension curtailment loss during 2018 . Additionally, the Company recorded $1.2 million in settlement charges during 2018 related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits under the U.S. Shared Plans. Pension Plans — Post-Separation At the Separation, $11.0 million of net pension obligations related to international employees were transferred to the Company, which consisted of $17.4 million of projected benefit obligations and $6.4 million of plan assets, along with $1.1 million of related accumulated other comprehensive losses. Kontoor uses a December 31 measurement date for these plans. Kontoor's net pension costs and obligations are developed from actuarial valuations. Inherent in these valuations are key assumptions, including discount rates, salary growth, long-term return on plan assets, retirement rates, mortality rates, and other factors. The Company's selection of assumptions is based on historical trends and known economic and market conditions at the time of valuation, as well as independent studies of trends performed by actuaries. However, actual results may differ substantially from the estimates that were based on the critical assumptions. The following table presents key components of pension costs, amounts recorded in the balance sheet and related key assumptions: (In thousands) Year Ended December 2019 Amount included in the statement of income: Net pension costs - service costs $ 680 Actuarial assumptions used to determine pension expense: Discount rate in effect for determining service cost 1.28 % Rate of inflation 1.80 % Expected long-term return on plan assets 3.00 % Rate of compensation increase 3.00 % (In thousands) December 2019 Amount included in the balance sheet: Projected benefit obligations $ 20,651 Fair value of plan assets 7,427 Funded status - recorded in other liabilities (Note 11) $ 13,224 Accumulated other comprehensive loss, pretax - net deferred actuarial losses (3,068 ) Actuarial assumptions used to determine pension obligation: Discount rate 0.68 % Rate of compensation increase 3.00 % Accumulated benefit obligations $ 11,636 Net pension costs are reflected in the Company's statements of income within "selling, general and administrative expenses." Plan assets are invested in group insurance contracts, the fair value of which are provided by the insurance companies (Level 2). Refer to Note 13 to the Company's financial statements for a description of the three levels of the fair value hierarchy. Other Retirement and Savings Plans Kontoor sponsors a nonqualified retirement savings plan for employees whose contributions to a 401(k) plan would be limited by provisions of the Internal Revenue Code. This plan allows participants to defer a portion of their compensation and to receive matching contributions for a portion of the deferred amounts. Certain of the Company’s employees participate in this plan. Participants earn a return on their deferred compensation based on their selection of a hypothetical portfolio of publicly traded mutual funds and a separately managed fixed-income fund. Changes in the fair value of the participants’ hypothetical investments are recorded as an adjustment to deferred compensation liabilities. Deferred compensation, including accumulated earnings, is distributable in cash at participant-specified dates upon retirement, death, disability or termination of employment. At December 2019 , the liability to the Company’s participants was $59.9 million , of which $6.5 million was recorded in "accrued liabilities" (Note 11) and $53.4 million was recorded in "other liabilities" (Note 11). At December 2018 , the liability to the Company’s participants was $46.7 million , of which $11.7 million was recorded in "accrued liabilities" (Note 11) and $35.0 million was recorded in "other liabilities" (Note 11). Beginning in 2019, the Company also sponsors a similar nonqualified plan that permits nonemployee members of the Board of Directors to defer their Board compensation. At December 2019, the Company's liability for this plan was $0.2 million and was recorded in "other liabilities" (Note 11). Kontoor has purchased publicly traded mutual funds and a separately managed fixed-income fund in the same amounts as the participant-directed hypothetical investments underlying the employee deferred compensation liabilities. These investment securities and earnings thereon are intended to provide a source of funds to meet the deferred compensation obligations, and serve as an economic hedge of the financial impact of changes in deferred compensation liabilities. They are held in an irrevocable trust but are subject to claims of creditors in the event of Kontoor’s insolvency. Accordingly, at December 2019 , the fair value of investments attributable to the Company’s participants was $59.9 million , of which $6.5 million was recorded in "other current assets" and $53.4 million was recorded in "other assets" (Note 9). At December 2018 , the fair value of investments attributable to the Company’s participants was $46.7 million , of which $11.7 million was recorded in "other current assets" and $35.0 million was recorded in "other assets" (Note 9). Kontoor sponsors 401(k) plans as well as other domestic and foreign retirement and savings plans. The Company’s expense under these plans was $7.9 million in 2019 , $11.0 million in 2018 and $10.2 million in 2017 . |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Summary of Derivative Financial Instruments On April 24, 2019, the Company began entering into derivative contracts with external counterparties to hedge certain foreign currency transactions. The notional amount of all outstanding foreign currency exchange contracts was $341.6 million at December 2019 , consisting primarily of contracts hedging exposures to the euro, Mexican peso, Canadian dollar, British pound, Polish zloty and Swedish krona. Foreign currency exchange contracts have maturities up to 20 months. On July 24, 2019, the Company entered into "floating to fixed" derivative agreements to mitigate exposure to volatility in LIBOR rates on the Company's future interest payments. The notional amount of the interest rate swap agreements was $475.0 million at December 2019 . Because these interest rate swap agreements meet the criteria for hedge accounting, all related gains and losses are deferred within accumulated other comprehensive loss ("AOCL") and are being amortized through April 18, 2024. The Company's outstanding derivative financial instruments met the criteria for hedge accounting at the inception of the hedging relationship, although a limited number of foreign currency exchange contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes. The following table presents the fair value of outstanding derivatives on an individual contract basis: December 2019 (In thousands) Fair Value of Derivatives with Unrealized Gains Fair Value of Derivatives with Unrealized Losses Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 5,199 $ (2,690 ) Interest rate swap agreements — (3,089 ) Derivatives not designated as hedging instruments: Foreign currency exchange contracts 364 (105 ) Total derivatives $ 5,563 $ (5,884 ) The Company records and presents the fair value of all derivative assets and liabilities in the Company's balance sheets on a gross basis, even though certain of the derivative contracts are subject to master netting agreements. If the Company were to offset and record the asset and liability balances of its derivative contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Company's balance sheets would be adjusted from the current gross presentation to the net amounts. The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: December 2019 (In thousands) Derivative Asset Derivative Liability Gross amounts presented in the balance sheet $ 5,563 $ (5,884 ) Gross amounts not offset in the balance sheet (1,133 ) 1,133 Net amounts $ 4,430 $ (4,751 ) The following table presents the location of derivatives in the Company's balance sheet, with current or noncurrent classification based on maturity dates: (In thousands) December 2019 Other current assets $ 4,303 Accrued liabilities (2,058 ) Other assets 1,260 Other liabilities (3,826 ) Cash Flow Hedges The following tables present the effects of cash flow hedges included in the Company's statements of income and statements of comprehensive income: (In thousands) Gain (Loss) on Derivatives Recognized in OCI Cash Flow Hedging Relationships Year Ended December 2019 Foreign currency exchange contracts $ 3,683 Interest rate swap agreements (1,954 ) Total $ 1,729 (In thousands) Gain (Loss) Reclassified from AOCL into Income Location of Gain (Loss) Year Ended December 2019 Net revenues $ (844 ) Cost of goods sold 6,745 Other expense, net 343 Interest expense 1,136 Total $ 7,380 Derivative Contracts Not Designated as Hedge s The Company uses derivative contracts to manage foreign currency exchange risk on certain accounts receivable and accounts payable. These contracts are not designated as hedges and are recorded at fair value in the Company's balance sheets. Changes in the fair values of these instruments are recognized directly in earnings. Gains or losses on these contracts largely offset the net transaction gains or losses on the related assets and liabilities. The following table presents a summary of these derivatives included in the Company's statement of income: (In thousands) Location of Gain (Loss) on Derivatives Recognized in Income Gain (Loss) on Derivatives Recognized in Income Derivatives Not Designated as Hedges Year Ended December 2019 Foreign currency exchange contracts Cost of goods sold $ 829 $ 829 Other Derivative Information There were no significant amounts recognized in earnings for the ineffective portion of any hedging relationships during 2019. In connection with the Separation, VF transferred to the Company $11.6 million of unrecognized gains on foreign currency exchange contracts related to the Jeanswear business. These gains were deferred in AOCL and are being reclassified to earnings as the Company recognizes the underlying transactions in net revenue. At December 2019, AOCL included $7.4 million |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Certain assets and liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. • Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company's own data and judgments about assumptions that market participants would use in pricing the asset or liability. Recurring Fair Value Measurements The following table presents financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis: Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2019 Financial assets: Cash equivalents: Money market funds $ 25,706 $ 25,706 $ — $ — Time deposits 4,788 4,788 — — Foreign currency exchange contracts 5,563 — 5,563 — Investment securities 59,922 56,437 3,485 — Financial liabilities: Foreign currency exchange contracts 2,795 — 2,795 — Interest rate swap agreements 3,089 — 3,089 — Deferred compensation 60,129 — 60,129 — Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2018 Financial assets: Cash equivalents: Money market funds $ 21,687 $ 21,687 $ — $ — Time deposits 2,518 2,518 — — Investment securities 46,666 46,666 — — Financial liabilities: Deferred compensation 46,666 — 46,666 — The Company's cash equivalents include money market funds and short-term time deposits that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign currency exchange forward contracts and interest rate swap agreements, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and observable interest rate yield curves for interest rate swap agreements. Investment securities are held in the Company's deferred compensation plans as an economic hedge of the related deferred compensation liabilities. These investments are primarily comprised of mutual funds (Level 1) that are valued based on quoted prices in active markets and a separately managed fixed-income fund (Level 2) with underlying investments that are valued based on quoted prices for similar assets in active markets or quoted prices in inactive markets for identical assets. Liabilities related to the Company's deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments (Level 2). Additionally, at December 2019 , the carrying value of the Company's long-term debt was $913.3 million compared to a fair value of $906.1 million . The fair value of long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings. All other financial assets and financial liabilities are recorded in the Company's financial statements at cost. These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, due from former parent, notes receivable from former parent, short-term borrowings, accounts payable, due to former parent, notes payable to former parent and accrued liabilities. At December 2019 and December 2018 , their carrying values approximated fair value due to the short-term nature of these instruments. The Company did not transfer any assets or liabilities among the levels of the fair value hierarchy during the years ended December 2019 or December 2018 . Nonrecurring Fair Value Measurements Certain non-financial assets, primarily property, plant and equipment, operating lease assets, goodwill and intangible assets, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, these assets are required to be assessed for impairment when events or circumstances indicate that carrying value may not be recoverable, and at least annually for goodwill and indefinite-lived intangible assets. In the event that an impairment is required, the asset is adjusted to fair value, using market-based assumptions. Rock & Republic ® Trademark Intangible Asset Impairment Analysis — The Rock & Republic ® brand has a domestic exclusive wholesale distribution and licensing arrangement that covers all branded apparel, accessories and other merchandise. During the quarter ended June 30, 2018, management identified a triggering event based on expected modifications to the arrangement, and performed a quantitative impairment analysis of the Rock & Republic ® trademark intangible asset to determine if the carrying value was recoverable. Based on the analysis performed, the undiscounted cash flows exceeded the carrying value of $49.0 million and management concluded that the trademark intangible asset did not require further testing. During the third quarter of 2019, management determined that the exclusive domestic wholesale distribution and licensing agreement of the Rock & Republic ® brand would not be extended. This was considered a triggering event that required management to perform a quantitative impairment analysis of the Rock & Republic ® trademark intangible asset as of August 2019. Based on this analysis, the Company recorded a $32.6 million non-cash impairment charge which was reflected within "non-cash impairment of intangible asset" in the Company's statement of income during the third quarter of 2019. The Company did no t incur any impairment charges during 2018. Management used the income-based relief-from-royalty method to calculate the pre-tax undiscounted future cash flows in estimating the fair value of the Rock & Republic ® trademark intangible asset, as described in Note 1 to the Company's financial statements. Key assumptions utilized within the quantitative impairment analysis included (1) long-term growth in revenues resulting from projected expansion across multiple distribution channels, including licensing arrangements within international markets, (2) royalty rates based on historical arrangements as well as known royalty rates of comparable owned and third-party brands and (3) market-based discount rates. It is possible that the Company's conclusions regarding fair value of the Rock & Republic ® trademark intangible asset could change in future periods. There can be no assurance that the estimates and assumptions used in the Company's intangible asset impairment testing will prove to be accurate predictions of the future. For example, variations in the Company's assumptions related to discount rates, comparable company market approach inputs, business performance and execution of planned growth strategies could impact future conclusions. Annual Goodwill and Indefinite-lived Intangible Assets Impairment Analysis — Management performed its annual impairment testing of goodwill and indefinite-lived intangible assets as of the beginning of the fourth quarter of 2019 for all reporting units and indefinite-lived intangible assets. Based on results of the qualitative impairment assessment, further testing was not necessary and no impairment charges of goodwill or indefinite-lived intangible assets were recorded in 2019. Refer to Part II, Item 7 - Critical Accounting Policies and Estimates for additional discussion regarding non-recurring fair value measurements. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 28, 2019 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE LOSS The Company's comprehensive income consists of net income and specified components of OCI, which relate to changes in assets and liabilities that are not included in net income but are instead deferred and accumulated within a separate component of equity in the Company's balance sheets. The Company's comprehensive income is presented in the Company's statements of comprehensive income. The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) December 2019 December 2018 December 2017 Foreign currency translation $ (84,118 ) $ (145,182 ) $ (122,482 ) Defined benefit pension plans (2,301 ) — — Derivative financial instruments 6,721 — — Accumulated other comprehensive loss $ (79,698 ) $ (145,182 ) $ (122,482 ) The following table presents changes in AOCL and related tax impact: (In thousands) Foreign Currency Translation Defined Derivative Total Balance, December 2016 $ (148,088 ) $ — $ — $ (148,088 ) Other comprehensive income (loss) 26,682 — — 26,682 Tax benefit (expense) (1,076 ) — — (1,076 ) Net other comprehensive income (loss) 25,606 — — 25,606 Balance, December 2017 $ (122,482 ) $ — $ — $ (122,482 ) Other comprehensive income (loss) (22,700 ) — — (22,700 ) Net other comprehensive income (loss) (22,700 ) — — (22,700 ) Balance, December 2018 (145,182 ) — — (145,182 ) Other comprehensive income (loss) before reclassifications 3,167 (2,010 ) 1,729 2,886 Amounts reclassified from accumulated other comprehensive income (loss) — — (7,380 ) (7,380 ) Net other comprehensive income (loss) 3,167 (2,010 ) (5,651 ) (4,494 ) Amounts transferred from former parent 57,897 (1,058 ) 11,645 68,484 Tax benefit (expense) — 767 727 1,494 Balance, December 2019 $ (84,118 ) $ (2,301 ) $ 6,721 $ (79,698 ) The following table presents reclassifications out of AOCL: (In thousands) Year Ended December Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2019 2018 2017 Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ (844 ) $ — $ — Foreign currency exchange contracts Cost of goods sold 6,745 — — Foreign currency exchange contracts Other expense, net 343 — — Interest rate swap agreements Interest expense 1,136 — — Total before tax 7,380 — — Tax benefit (expense) Income taxes (706 ) — — Total reclassifications for the period, net of tax $ 6,674 $ — $ — |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Description of Plans Prior to the Separation, certain Company employees participated in the VF amended and restated 1996 Stock Compensation Plan (the "VF Plan"), pursuant to which VF granted shares of options, restricted stock units (“RSUs”), performance-based restricted stock units ("PRSUs") and restricted stock awards ("RSAs"). Effective as of May 20, 2019, the Company's Board of Directors authorized the Kontoor Brands, Inc. 2019 Stock Compensation Plan (the "2019 Plan"). Pursuant to the 2019 Plan, the Company is authorized to grant equity-based awards to officers, key employees and nonemployee members of the Company’s Board of Directors in the form of options, RSUs, PRSUs and RSAs. The 2019 Plan also allows for the issuance of replacement grants related to the conversion of VF awards for employees that transferred from VF to the Company (defined below as “Converted Awards”). A maximum of 7.5 million shares of Common Stock, plus shares subject to Converted Awards, may be issued under the 2019 Plan. As of December 2019, 6.6 million shares remained available for future grants. Shares delivered under the 2019 Plan are issued from Kontoor's authorized but unissued Common Stock. Substantially all of the Company’s outstanding awards are classified as equity awards, which are accounted for within stockholders’ equity in the Company's balance sheet. Compensation cost for all awards expected to vest is recognized over the shorter of the requisite service period or the vesting period. Awards that do not vest are forfeited. Conversion at Separation In accordance with the terms of the Separation, share-based awards granted to Company employees under the VF Plan ("VF Awards") were converted at the time of Separation to options, RSUs, PRSUs and RSAs totaling approximately 2.4 million shares of Kontoor Common Stock (the "Converted Awards"). Certain stock option and PRSU awards were retained by VF to be settled in accordance with their original terms under the VF Plan. The VF Awards were converted using a ratio of 2.425563 , which was designed to preserve the intrinsic economic value of the VF Awards after taking into consideration the spin-off. The Company performed a comparison of the fair value immediately before the conversion to the fair value immediately after the conversion, and recorded compensation expense of $0.5 million at the time of Separation to reflect the incremental fair value of the Converted Awards. Stock-based Compensation Expense For the period from 2017 through the Separation date, stock-based compensation expense was presented on a carve-out basis, and included expense for VF grants related directly to employees that were historically dedicated to the Jeanswear business ("direct employees") as well as an allocation of VF’s corporate and shared employee stock-based compensation expenses. Of the total stock-based compensation cost recognized by the Company in 2019 (through the Separation date), 2018 and 2017, $7.3 million , $10.9 million and $9.2 million , respectively, related to direct employees and $2.2 million , $4.0 million and $3.8 million , respectively, related to allocations of VF’s corporate and shared employee stock-based compensation expenses. For the period from the Separation date through December 2019, stock-based compensation includes expense related to the Converted Awards and new grants under the 2019 Plan, as well as the expense related to grants remaining under the VF Plan, all of which is being amortized over the remaining vesting periods of the awards. The following table presents total stock-based compensation cost and the associated income tax benefits recognized in the statements of income for all awards: Year Ended December (In thousands) 2019 2018 2017 Stock-based compensation cost $ 23,844 $ 14,894 $ 13,021 Income tax benefits 5,011 3,692 4,844 There were no material amounts of stock-based compensation costs included in inventory at December 2019, December 2018 or December 2017. At December 2019, there was $23.1 million of total unrecognized compensation cost related to all stock-based compensation arrangements for Company employees that will be recognized over a weighted average period of approximately 1.5 years. Stock Options Converted Awards — The following information relates to the historical valuation of stock option awards granted by VF prior to the Separation. The exercise price of each option was equal to the fair market value of VF's common stock on the grant date. The grant date fair value of each option award is calculated using a lattice option-pricing valuation model, which incorporates a range of assumptions for inputs as follows: 2019 2018 2017 Expected volatility 25% to 27% 22% to 29 23% to 30 Weighted average expected volatility 26% 25% 24% Expected term (in years) 6.1 to 7.5 6.1 to 7.6 6.3 to 7.7 Weighted average dividend yield 2.5% 2.9% 2.8% Risk-free interest rate 2.5% to 2.8% 1.9% to 3.2 0.7% to 2.4 Weighted average fair value at date of grant $18.13 $15.40 $9.90 Employee stock options vest in equal annual installments over three years, and compensation cost is recognized ratably over the shorter of the requisite service period or the vesting period. All options granted have ten-year terms. Stock options granted to employees that transferred from VF to the Company with the Separation were included in the Converted Awards as discussed above except for retirement eligible employees, whose options remained with VF. The adjusted exercise price and outstanding quantities of the Converted Awards are included in the table below. No stock options have been granted by the Company subsequent to the Separation. The following table presents stock option activity from the Separation date to December 2019 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Converted Awards at May 23, 2019 1,835,236 25.77 6.4 $ 30,682 Exercised (113,548 ) 19.66 Forfeited/cancelled (5,666 ) 29.56 Outstanding at December 2019 1,716,022 26.16 6.6 $ 28,016 Exercisable at December 2019 1,085,556 25.71 6.0 $ 18,218 The total fair value of stock options that vested since the Separation was $0.3 million . The total intrinsic value of stock options exercised since the Separation was $2.0 million . Restricted Stock Unit s Converted Awards — Prior to the Separation, VF granted PRSUs that enabled employees to receive shares of VF Common Stock in the year following the conclusion of a three-year performance period. Each PRSU had a potential final payout ranging from zero to two shares of VF Common Stock. For PRSUs granted in 2016 and 2017, the number of shares earned by participants, if any, was based on achievement of a three-year baseline profitability goal and annually established performance goals set by the Talent and Compensation Committee of VF’s Board of Directors. For PRSUs granted in 2018, the number of shares earned by participants, if any, was based on achievement of three-year financial targets set by the Talent and Compensation Committee of VF’s Board of Directors. The actual number of shares earned may also be adjusted upward or downward by 25% of the target award based on how VF’s total shareholder return (“TSR”) over the three-year period compares to the TSR for companies included in the Standard & Poor’s 500 Consumer Discretionary Index for 2018 grants, and the Standard & Poor’s 500 Index for 2017 grants. The grant date fair value of the TSR-based adjustment was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs and was $4.61 and $2.67 per share for the 2018 and 2017 PRSU grants, respectively. The 2016 PRSUs were retained by VF and paid out in June 2019 under the original terms of the awards. A portion of the 2017 and 2018 PRSUs was retained by VF to be paid out under the original terms of the awards. The remaining 2017 PRSUs were converted to 43,786 shares of Kontoor non-performance based RSU awards, and the remaining 2018 PRSUs were converted to 82,542 shares of Kontoor PRSU awards, all of which are included in the table below. In addition, VF granted time-based RSUs to employees as part of its annual stock compensation program during 2018. Each time-based RSU entitles the holder to one share of VF Common Stock. These awards typically vest 50% over a two-year period and 50% over a four-year period from the date of grant. All of these awards were converted to 196,325 shares of Kontoor time-based RSUs and are included in the table below. New Awards — Kontoor grants PRSUs that enable employees to receive shares of Kontoor Common Stock at the end of a three-year performance period. Each PRSU has a potential final payout ranging from zero to two shares of Kontoor Common Stock. The number of shares earned by participants, if any, is based on achievement of annually established performance goals set by the Talent and Compensation Committee of the Kontoor Board of Directors. Shares earned will be issued to participants following the conclusion of the three-year performance period. Kontoor also grants nonperformance-based RSUs to certain key employees and nonemployee members of the Board of Directors. Each time-based employee RSU entitles the holder to one share of Kontoor Common Stock and typically vests over a three-year period. Each RSU granted to a nonemployee member of the Board of Directors vests upon grant and will be settled in one share of Kontoor Common Stock one year from the date of grant. Dividend equivalents on the RSUs accumulate during the vesting period and are payable in additional shares of Kontoor Common Stock when the RSUs vest. Dividend equivalents are subject to the same risk of forfeiture as the RSUs. During 2019, the Company granted new awards under the 2019 Plan, including PRSUs for 422,359 shares granted to employees, time-based RSUs for 348,906 shares granted to employees and time-based RSUs for 29,739 shares granted to nonemployee members of the Board of Directors. The grant date fair value of the awards was equal to the per share fair market value of the underlying Kontoor Common Stock on each grant date. The following table presents RSU and PRSU activity from the Separation date to December 2019 : Performance-based Nonperformance-based Number Outstanding Weighted Average Grant Date Fair Value Number Outstanding Weighted Average Grant Date Fair Value Converted Awards at May 23, 2019 82,542 31.00 240,111 30.26 Granted 422,359 32.27 378,645 32.52 Dividend equivalents — — 17,407 31.48 Issued as Common Stock — — (4,691 ) 25.00 Forfeited/canceled (604 ) 31.00 (4,596 ) 29.04 Outstanding at December 2019 504,297 32.06 626,876 31.71 Vested at December 2019 — — 45,034 34.11 At December 2019 , the fair value of PRSU and RSU awards outstanding was $21.4 million and $26.6 million , respectively. Restricted Stock Awards Converted Awards — Prior to the Separation, VF granted RSAs of VF Common Stock to certain members of management with vesting periods of up to five years from the grant date. The fair value of the RSAs was equal to the fair market value of VF Common Stock at the grant date. Dividends accumulate in the form of additional RSAs and are subject to the same risk of forfeiture as the RSAs. These awards were converted to Kontoor RSAs at the Separation and are included in the table below. They generally have the same terms and conditions as the original awards and are being amortized ratably over the remaining vesting periods. The following table presents RSA activity from the Separation date to December 2019 : Nonvested Shares Outstanding Weighted Average Grant Date Fair Value Converted Awards at May 23, 2019 273,531 25.11 Dividend equivalents 5,702 25.15 Vested (85,082 ) 25.02 Nonvested shares at December 2019 194,151 25.15 The fair value of nonvested RSAs was $8.2 million at December 2019 . The fair value of the shares that vested since the Separation was $2.6 million . During 2019, approximately 39,700 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As discussed in Note 1 to the Company's financial statements, income taxes for periods prior to the Separation were prepared on a carve-out basis of accounting. The following table presents income before income taxes for which the provision for income taxes was computed: Year Ended December (In thousands) 2019 2018 2017 Domestic $ 61,691 $ 159,716 $ 169,160 Foreign 73,503 180,362 189,993 Income before income taxes $ 135,194 $ 340,078 $ 359,153 The following table presents components of the provision for income taxes: Year Ended December (In thousands) 2019 2018 2017 Current: Federal $ 14,831 $ 29,670 $ 161,482 Foreign 23,017 32,501 31,444 State 4,866 12,303 13,546 Total current income taxes 42,714 74,474 206,472 Deferred: Federal and state (5,912 ) 4,067 36,009 Foreign 1,738 (1,536 ) 481 Total deferred income taxes (4,174 ) 2,531 36,490 Total provision for income taxes $ 38,540 $ 77,005 $ 242,962 On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act included a broad range of complex provisions impacting the taxation of multi-national companies. Generally, accounting for the impacts of newly enacted tax legislation is required to be recorded in the period of enactment; however, in response to the complexities and ambiguity surrounding the Tax Act, the Securities and Exchange Commission ("SEC") released Staff Accounting Bulletin ("SAB 118") to provide companies with relief around the initial accounting for the Tax Act. Pursuant to SAB 118, the SEC provided a one-year measurement period for companies to analyze and finalize the accounting for the Tax Act. During the one-year measurement period, SAB 118 allowed companies to recognize provisional amounts when reasonable estimates could be made for the impacts resulting from the Tax Act. The Company finalized the accounting for the Tax Act as detailed below. During 2017, the Company recognized a provisional charge of $136.7 million , primarily comprised of $110.6 million related to the transition tax and $19.4 million of tax expense related to revaluing U.S. deferred tax assets and liabilities using the new U.S. corporate tax rate of 21%. The transition tax payable was not transferred from the former parent to the Company with the Separation. This treatment is consistent with other taxes payable for which the Company is not liable under relevant tax laws and the Tax Matters Agreement. Other provisional charges of $6.7 million were recorded in 2017, primarily related to establishing a deferred tax liability for foreign withholding and state taxes related to unremitted foreign earnings. The Company finalized its accounting for the Tax Act during the one-year measurement period provided by SAB 118, and recognized additional net charges of $5.5 million in 2018, primarily comprised of $5.7 million of charges related to the transition tax, additional tax benefits of $1.5 million related to revaluing U.S. deferred tax assets and liabilities using the new U.S. corporate tax rate of 21%, and other charges of $1.3 million related to establishing a deferred tax liability for foreign withholding taxes. In accordance with GAAP, companies may make an accounting policy election to either treat taxes resulting from global intangible low-tax income ("GILTI") as a current-period expense when they are incurred or factor such amounts into the measurement of deferred taxes. The Company completed its analysis related to this accounting policy election and decided to treat the taxes resulting from GILTI as a component of current income tax expense, consistent with the treatment prior to the accounting policy election. The following table presents a reconciliation of the differences between income taxes computed by applying the statutory federal income tax rate and income tax expense reported in the financial statements: Year Ended December (In thousands) 2019 2018 2017 Tax at federal statutory rate $ 28,391 $ 71,416 $ 125,703 State income taxes, net of federal tax benefit 2,476 10,532 5,788 Foreign rate differences (8,983 ) (5,125 ) (28,077 ) Tax reform 258 5,526 136,722 Stock-based compensation - federal (3,169 ) (2,692 ) (2,929 ) Adjustments to opening balances 1,928 — — Change in valuation allowance 17,025 (2,707 ) 5,120 GILTI 2,437 — — Change in indefinite reinvestment assertions (3,914 ) — — Other 2,091 55 635 Income taxes $ 38,540 $ 77,005 $ 242,962 Income tax expense includes tax benefits of $0.6 million , $5.8 million and $4.7 million in 2019 , 2018 and 2017 , respectively, from favorable audit outcomes on certain tax matters and from expiration of statutes of limitations. The following table presents the components of deferred income tax assets and liabilities: (In thousands) December 2019 December 2018 Deferred income tax assets: Inventories $ 7,811 $ 7,676 Deferred compensation 13,816 11,701 Other employee benefits 10,125 3,297 Stock-based compensation 8,076 6,243 Other accrued expenses 27,369 19,266 Intangible assets 21,356 7,541 Leases 20,219 — Operating loss carryforwards 9,779 23,702 Gross deferred income tax assets 118,551 79,426 Less: valuation allowance (16,699 ) (24,175 ) Net deferred income tax assets 101,852 55,251 Deferred income tax liabilities: Leases 19,417 — Depreciation 2,959 4,142 Taxes on unremitted earnings 2,163 9,702 Other deferred tax liabilities 221 1,195 Deferred income tax liabilities 24,760 15,039 Total net deferred income tax assets $ 77,092 $ 40,212 Amounts included in the balance sheets: Deferred income taxes - assets $ 79,551 $ 42,891 Deferred income taxes - liabilities (2,459 ) (2,679 ) $ 77,092 $ 40,212 At the end of 2019, the Company is not asserting indefinite reinvestment with regards to foreign short-term liquid assets, except for certain jurisdictions with foreign earnings totaling $19.7 million that are considered indefinitely reinvested. The Company has determined the unrecorded deferred tax liability associated with the $19.7 million basis difference is approximately $1.1 million , primarily related to withholding taxes. The Company has $2.2 million of potential tax benefits for foreign operating loss carryforwards, none of which have an unlimited carryforward life. In addition, there are $7.6 million of potential tax benefits for state operating loss and credit carryforwards that expire between 2020 and 2039 . A valuation allowance has been provided where it is more likely than not that deferred tax assets related to operating loss carryforwards will not be realized. Valuation allowances totaled $1.8 million for available foreign operating loss carryforwards, $7.6 million for available state operating loss and credit carryforwards, $6.7 million for other foreign deferred income tax assets, and $0.6 million for other state deferred income tax assets. During 2019 , the Company recorded tax expense for a net increase in valuation allowances of $0.6 million related to state operating loss and credit carryforwards as well as other state deferred income tax assets, a net increase in valuation allowances of $6.0 million related to a change in judgement about the realizability of certain foreign deferred tax balances transferred from former parent with the Separation, and $10.4 million related to current year foreign operating losses and other deferred tax assets, inclusive of foreign currency effects. As a result of the Separation, a $24.5 million decrease in valuation allowances was recorded within "former parent investment" in the financial statements, since the corresponding tax attributes reported by the Company on a carve-out basis were not transferred to the Company, as discussed in Note 1 to the Company's financial statements. The following table presents a reconciliation of the change in the accrual for unrecognized income tax benefits: (In thousands) Unrecognized Accrued Unrecognized Income Tax Benefits Balance, December 2016 $ 48,842 $ 1,411 $ 50,253 Additions for current year tax positions 7,419 — 7,419 Additions for prior year tax positions 75 1,458 1,533 Reductions for prior year tax positions (418 ) (1 ) (419 ) Reductions due to statute expirations (4,655 ) (380 ) (5,035 ) Balance, December 2017 51,263 2,488 53,751 Additions for current year tax positions 2,458 8 2,466 Additions for prior year tax positions 6,286 2,870 9,156 Reductions for prior year tax positions (191 ) — (191 ) Reductions due to statute expirations (5,735 ) (427 ) (6,162 ) Balance, December 2018 54,081 4,939 59,020 Additions for current year tax positions 1,260 — 1,260 Additions for prior year tax positions 4,881 2,632 7,513 Reductions for prior year tax positions (3,680 ) (318 ) (3,998 ) Reductions due to statute expirations (674 ) (127 ) (801 ) Payments in settlement (205 ) (183 ) (388 ) Amounts transferred to former parent (41,986 ) (2,728 ) (44,714 ) Balance, December 2019 $ 13,677 $ 4,215 $ 17,892 (In thousands) December 2019 December 2018 Amounts included in the balance sheets: Unrecognized income tax benefits, including interest and penalties $ 17,892 $ 59,020 Less: deferred tax benefits (3,626 ) (7,724 ) Total unrecognized tax benefits $ 14,266 $ 51,296 The unrecognized tax benefits of $14.3 million at the end of 2019 , if recognized, would reduce the annual effective tax rate. The Company will file a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. The Company has not filed its initial consolidated U.S. federal income tax return; therefore, there are no open IRS examinations. However, the Company is currently subject to examination by various U.S. state and international tax authorities. Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded that the Company’s provision for income taxes is adequate. The outcome of any one examination is not expected to have a material impact on the Company’s financial statements. Management believes that some of these audits and negotiations will conclude during the next 12 months. Management also believes that it is reasonably possible that the amount of unrecognized tax benefits may decrease by $0.9 million within the next 12 months due to settlement of audits and expiration of statutes of limitations, $0.7 million |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 28, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The computation of basic and diluted earnings per share ("EPS") is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively. On May 22, 2019, the Separation from VF was effected through a pro-rata distribution of one share of the Company's common stock for every seven shares of VF common stock held at the close of business on the record date of May 10, 2019. As a result, on May 23, 2019, the Company had 56,647,561 shares of common stock outstanding. This share amount was utilized for the calculation of basic and diluted earnings per share for all periods presented through the Separation date. After the Separation date, actual outstanding shares are used to calculate both basic and diluted weighted average number of common shares outstanding. The following table presents the computation of basic and diluted EPS: Year Ended December (In thousands, except per share amounts) 2019 2018 2017 Net income $ 96,654 $ 263,073 $ 116,191 Basic weighted average shares outstanding 56,688 56,648 56,648 Dilutive effect of stock-based awards 521 — — Diluted weighted average shares outstanding 57,209 56,648 56,648 Earnings per share: Basic earnings per share $ 1.71 $ 4.64 $ 2.05 Diluted earnings per share $ 1.69 $ 4.64 $ 2.05 A total of 0.1 million shares related to stock-based awards were excluded from the calculation of diluted earnings per share in 2019 because the effect of their inclusion would have been anti-dilutive. A total of 0.3 million shares related to performance-based RSUs were excluded from the calculations of diluted earnings per share in 2019 because these units were not considered to be contingent outstanding shares. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | COMMITMENTS The Company is obligated under noncancelable operating leases. Refer to Note 19 to the Company's financial statements for additional information related to future lease payments. The Company has entered into licensing agreements that provide the Company rights to market products under trademarks owned by other parties. Royalties under these agreements are recognized within "cost of goods sold" in the statements of income. Certain of these agreements contain minimum royalty and minimum advertising requirements. Future minimum royalty payments, including any required advertising payments, are $1.0 million , $1.0 million , $0.1 million , $0.1 million and $0.1 million for 2020 through 2024, respectively. There are currently no payments due beyond 2024. In the ordinary course of business, the Company has entered into purchase commitments for raw materials, contract production and finished products. These agreements typically range from one to five months in duration and require total payments of $347.7 million in 2020. The Company has entered into commitments for (i) service and maintenance agreements related to management information systems, (ii) capital spending and (iii) advertising. Future payments under these agreements are $56.0 million , $28.1 million , $7.7 million , $6.1 million , $3.3 million and $17.5 million for 2020 through 2024 and thereafter, respectively. Surety bonds, customs bonds, standby letters of credit and international bank guarantees, all of which represent contingent guarantees of performance under self-insurance and other programs, totaled $32.6 million as of December 2019 . These commitments would only be drawn upon if the Company were to fail to meet related claims or other obligations. |
LEASES
LEASES | 12 Months Ended |
Dec. 28, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The following table presents lease-related assets and liabilities recorded in the Company's balance sheet: (In thousands) December 2019 Assets Operating lease assets, noncurrent $ 86,582 Total lease assets $ 86,582 Liabilities Operating lease liabilities, current $ 35,389 Operating lease liabilities, noncurrent 54,746 Total lease liabilities $ 90,135 Weighted-average remaining lease term (in years) Operating leases 3.85 Weighted-average discount rate Operating leases 3.15 % Lease costs The following table presents certain information related to lease costs for operating leases: (In thousands) Year Ended December 2019 Operating lease costs $ 37,743 Short-term lease costs (excluding leases of one month or less) 3,043 Variable lease costs 5,300 Total lease costs $ 46,086 Rent expense associated with operating leases for the year ended December 2018 totaled approximately $40.8 million . Other information The following table presents supplemental cash flow and non-cash information related to leases: (In thousands) Year Ended December 2019 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 46,239 Right-of-use assets obtained in exchange for new operating leases - non-cash activity $ 39,874 The following table presents future maturities of operating lease liabilities as of December 2019 : (In thousands) Lease Obligations 2020 $ 36,711 2021 22,261 2022 11,979 2023 8,938 2024 5,222 Thereafter 6,574 Total future minimum lease payments 91,685 Less: amounts related to imputed interest (1,550 ) Present value of future minimum lease payments 90,135 Less: operating lease liabilities, current (35,389 ) Operating lease liabilities, noncurrent $ 54,746 As of December 2019 , the Company had entered into approximately $0.6 million of operating lease arrangements, on an undiscounted basis, that had not yet commenced. The Company continuously monitors and may negotiate contract amendments that include extensions or modifications to existing leases. The following table presents the future minimum lease payments during the noncancelable lease terms as of December 2018 , prior to the adoption of ASU 2016-02: (In thousands) December 2018 2019 $ 33,562 2020 29,246 2021 17,810 2022 7,932 2023 4,353 Thereafter 4,582 Total future minimum lease payments $ 97,485 |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING The Company incurs restructuring charges related to cost optimization of business activities, primarily related to severance and employee-related benefits. Of the $24.6 million of restructuring charges recognized during 2019, $13.8 million was reflected within "selling, general and administrative expenses" and $10.8 million within "costs of goods sold" in the statements of income. Of the $20.4 million of restructuring charges recognized during 2018, $9.1 million was reflected within "selling, general and administrative expenses" and $ 11.3 million within "cost of goods sold." Of the $9.5 million of restructuring charges recognized during 2017, $6.5 million was reflected within "selling, general and administrative expenses" and $3.0 million within "cost of goods sold." All of the $2.2 million total restructuring accrual reported in the Company's balance sheet at December 2019 is expected to be paid out within the next 12 months and is classified within "accrued liabilities." Of the $23.2 million total restructuring accrual at December 2018, $21.2 million was classified within "accrued liabilities" and the remaining $2.0 million to be paid out beyond the next 12 months was classified within "other liabilities." The following table presents the components of restructuring charges: Year Ended December (In thousands) 2019 2018 2017 Severance and employee-related benefits $ 14,903 $ 20,385 $ 9,541 Asset impairments 1,596 — — Inventory write-downs 4,403 — — Other 3,660 — — Total restructuring charges $ 24,562 $ 20,385 $ 9,541 The following table presents the restructuring charges by business segment: Year Ended December (In thousands) 2019 2018 2017 Wrangler $ 17,613 $ 13,358 $ 3,367 Lee 6,685 6,592 6,174 Other 264 435 — Total $ 24,562 $ 20,385 $ 9,541 The following table presents activity in the restructuring accrual for the periods ending December 2019 and December 2018: (In thousands) Severance Other Total Accrual at December 2017 $ 11,007 $ — $ 11,007 Charges 20,385 — 20,385 Cash payments (6,586 ) — (6,586 ) Adjustments to accruals (1,540 ) — (1,540 ) Currency translation (17 ) — (17 ) Accrual at December 2018 $ 23,249 $ — $ 23,249 Charges 14,903 3,660 18,563 Cash payments (31,201 ) (839 ) (32,040 ) Adjustments to accruals 1,663 — 1,663 Currency translation (58 ) (197 ) (255 ) Adjustment at Separation (6,384 ) (2,624 ) (9,008 ) Accrual at December 2019 $ 2,172 $ — $ 2,172 |
TRANSACTIONS WITH FORMER PARENT
TRANSACTIONS WITH FORMER PARENT | 12 Months Ended |
Dec. 28, 2019 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH FORMER PARENT | TRANSACTIONS WITH FORMER PARENT Prior to the Separation, the Company's financial statements were prepared on a carve-out basis and were derived from the consolidated financial statements and accounting records of VF. The following discussion summarizes activity between the Company and VF. Allocation of General Corporate Expenses Prior to the Separation, the Company's statements of income included expenses for certain centralized functions and other programs provided and administered by VF that were charged directly to the Company. In addition, for purposes of preparing these financial statements on a carve-out basis, the Company was allocated a portion of VF's total corporate expenses. Refer to Note 1 to the Company's financial statements for a discussion of the methodology used to allocate corporate-related costs for purposes of preparing these financial statements on a carve-out basis. Sales and Purchases To and From Former Parent The Company's sales to VF were $14.1 million through the Separation date in 2019, and $51.0 million and $45.5 million in 2018 and 2017 , respectively, which are included within "net revenues" in the Company's statements of income. The Company's cost of goods sold includes items purchased from VF totaling $0.5 million through the Separation date in 2019, and $2.1 million and $6.8 million in 2018 and 2017 , respectively. At December 2019 and 2018 , the aggregate amount of inventories purchased from VF that remained on the Company’s balance sheets was approximately $0.4 million and $0.8 million, respectively. Notes To and From Former Parent All notes to and from former parent were settled in connection with the Separation. At December 2018 , the Company had notes receivable from former parent of $517.9 million with VF as the counterparty. The weighted-average interest rate for these notes was approximately 3.4% at December 2018 . At December 2018 , the Company had notes payable to former parent of $269.1 million with VF as the counterparty. The weighted-average interest rate for these notes was approximately 3.4% at December 2018 . The Company recorded net interest income related to these notes of $3.8 million through the Separation date in 2019, and $7.7 million and $3.4 million in 2018 and 2017 , respectively, which is reflected within "interest income from former parent, net" in the Company's statements of income. Due To and From Former Parent All amounts due to and from former parent were settled in connection with the Separation. Balances that were due to and from former parent were generated by (i) the sale of trade accounts receivable to VF, (ii) hedging agreements with VF, and (iii) sourcing payable to VF. As discussed in Note 4 to the Company's financial statements, the Company sold certain of its trade accounts receivable to VF, who then sold them to a financial institution and periodically remitted cash back to the Company. Prior to the Separation, the Company did not enter into derivative contracts with external counterparties. However, VF entered into derivative contracts with external counterparties to hedge certain foreign currency transactions with exposure to the euro, Mexican peso, Polish zloty, Canadian dollar, and other currencies. The Company entered into offsetting internal contracts with VF with maturities up to 20 months, and cash settled with VF on any asset or liability that arose under these contracts. The following table presents components of due from former parent, current: (In thousands) December 2019 December 2018 Sale of trade accounts receivable $ — $ 544,858 Hedging agreements with VF — 2,832 $ — $ 547,690 The following table presents components of due from former parent, noncurrent: (In thousands) December 2019 December 2018 Hedging agreements with VF $ — $ 611 The following table presents components of due to former parent, current: (In thousands) December 2019 December 2018 Sourcing payable $ — $ 16,140 Net Transfers To and From VF Net transfers to and from VF are included within "former parent investment" in the statements of equity. The following table presents components of the transfers to and from VF: (In thousands) December 2019 (a) December 2018 December 2017 General financing activities $ (723,155 ) $ (32,498 ) $ (436,910 ) Corporate allocations 47,903 113,581 146,042 Stock-based compensation expense 9,582 14,894 13,021 Pension (benefit) costs (2,246 ) 6,260 6,748 Purchases from parent 3,193 998 2,357 Sales to parent (13,988 ) (50,962 ) (45,483 ) Other income tax 10,863 64,150 97,121 Transition tax related to the Tax Act 3,937 5,716 110,562 Cash dividend to former parent (1,032,948 ) — — Total net transfers to former parent $ (1,696,859 ) $ 122,139 $ (106,542 ) (a) Activity reflected through the Separation date. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 28, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (In thousands, except per share amounts) First (1) Second (2) Third (3) Fourth (4) Full (5) Year Ended December 2019 Net revenues $ 648,344 $ 609,746 $ 638,138 $ 652,611 $ 2,548,839 Operating income 25,195 53,520 31,028 58,547 168,290 Net income $ 15,413 $ 37,986 $ 14,502 $ 28,753 $ 96,654 Earnings per common share (5) Basic $ 0.27 $ 0.67 $ 0.26 $ 0.51 $ 1.71 Diluted 0.27 0.67 0.25 0.50 1.69 Dividends per common share $ — $ — $ 0.56 $ 0.56 $ 1.12 (In thousands, except per share amounts) First (1) Second (2) Third (3) Fourth (4) Full (5) Year Ended December 2018 Net revenues $ 669,663 $ 663,856 $ 704,246 $ 726,233 $ 2,763,998 Operating income 92,408 75,734 95,284 69,616 333,042 Net income $ 79,696 $ 60,458 $ 71,018 $ 51,902 $ 263,073 Earnings per common share (5) Basic $ 1.41 $ 1.07 $ 1.25 $ 0.92 $ 4.64 Diluted 1.41 1.07 1.25 0.92 4.64 Dividends per common share $ — $ — $ — $ — $ — (1) During the first quarter of 2019, the Company recorded costs of $36.6 million ( $33.4 million after-tax) related to cost optimization of business activities under restructuring programs (consisting primarily of severance and employee-related benefits) and the Separation and establishment of Kontoor as a standalone public company ("Separation costs"). During the first quarter of 2018, the Company recorded restructuring and Separation costs of $1.9 million ( $1.5 million after-tax). (2) During the second quarter of 2019, the Company recorded restructuring and Separation costs of $12.8 million ( $10.1 million after-tax). During the second quarter of 2018, the Company recorded restructuring and Separation costs of $2.0 million ( $1.7 million after-tax). (3) During the third quarter of 2019, the Company recorded restructuring and Separation costs of $19.4 million ( $14.9 million after-tax) and a non-cash impairment of intangible asset of $32.6 million ( $25.2 million after-tax) related to the Rock & Republic ® trademark intangible asset. During the third quarter of 2018, the Company recorded restructuring and Separation costs of $1.2 million ( $0.1 million after-tax). (4) During the fourth quarter of 2019, the Company recorded restructuring and Separation costs of $14.4 million ( $11.0 million after-tax) and additional expenses related to actions taken to exit certain points of distribution in India of $12.3 million ( $10.2 million after-tax). During the fourth quarter of 2018, the Company recorded restructuring and Separation costs of $23.4 million ( $18.4 million after-tax). (5) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 28, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividend On February 18, 2020, the Board of Directors declared a quarterly dividend of $0.56 per share of the Company's common stock. The cash dividend will be payable on March 20, 2020 , to shareholders of record at the close of business on March 10, 2020 . Income Taxes On January 17, 2020, the Swiss canton of Ticino formally adopted The Federal Act on Tax and AVS Financing (“Swiss Tax Act”) and the Company is currently evaluating the expected impact. The associated tax effects will be reflected in the first quarter of 2020, which is the period that the Swiss Tax Act adoption was enacted. The adoption of the Swiss Tax Act is expected to have a favorable one-time impact to tax expense, which could range from $5.5 million to $7.5 million |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 28, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II — Valuation and Qualifying Accounts ADDITIONS Description Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period (In thousands) Year ended December 2017 Allowance for doubtful accounts (a) $ 5,176 4,571 — 517 $ 9,230 Valuation allowance for deferred income tax assets (b) $ 21,762 5,120 — — $ 26,882 Year ended December 2018 Allowance for doubtful accounts (a) $ 9,230 7,025 — 5,706 $ 10,549 Valuation allowance for deferred income tax assets (b) $ 26,882 — — 2,707 $ 24,175 Year ended December 2019 Allowance for doubtful accounts (a) $ 10,549 5,988 — 4,685 $ 11,852 Valuation allowance for deferred income tax assets (b) $ 24,175 17,025 — 24,501 $ 16,699 (a) Deductions include accounts written off, net of recoveries, and the effects of foreign currency translation. (b) Additions relate to circumstances where it is more likely than not that deferred income tax assets will not be realized and the effects of foreign currency translation. As a result of the Separation in 2019, a $24.5 million decrease in valuation allowances was recorded within "former parent investment" in the financial statements, since the corresponding tax attributes reported by the Company on a carve-out basis were not transferred to the Company, as discussed in Note 1 to the Company's financial statements. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
Spin-Off Transaction | Spin-Off Transaction On May 22, 2019, VF Corporation ("VF" or "former parent") completed the spin-off of its Jeanswear business, which included the Wrangler ® , Lee ® and Rock & Republic ® brands, as well as the VF Outlet TM business. The spin-off transaction (the "Separation") was effected through a pro-rata distribution to VF shareholders of one share of Kontoor common stock for every seven shares of VF common stock held on the record date of May 10, 2019. Kontoor began to trade as a standalone public company (NYSE: KTB) on May 23, 2019. On May 17, 2019, the Company incurred $1.05 billion of indebtedness under a newly structured third-party debt issuance, the proceeds of which were used primarily to finance a cash transfer to VF in connection with the Separation. The Company entered into several agreements with VF that govern the relationship of the parties following the Separation, including the Separation and Distribution Agreement, the Tax Matters Agreement, the Transition Services Agreement, the Kontoor Intellectual Property License Agreement, the VF Intellectual Property License Agreement and the Employee Matters Agreement. Under the terms of the Transition Services Agreement, the Company and VF agreed to provide each other certain transitional services including information technology, information management, human resources, employee benefits administration, supply chain, facilities, and other limited finance and accounting-related services for periods up to 18 months, which may be extended subject to the mutual agreement of both parties. The Company also entered into certain commercial arrangements with VF. Revenues, expenses and operating expense reimbursements under these agreements are recorded within the reportable segments or within the "corporate and other expenses" line item in the reconciliation of segment profit in Note 3 to the Company's financial statements, based on the nature of the arrangements. |
Fiscal Year | Fiscal Year The Company operates and reports using a 52/53 week fiscal year ending on the Saturday closest to December 31 of each year. For presentation purposes herein, all references to periods ended December 2019 , December 2018 and December 2017 correspond to the 52-week fiscal years ended December 28, 2019 , December 29, 2018 and December 30, 2017 , respectively. |
Basis of Presentation | Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements for periods through the Separation date of May 22, 2019 were combined financial statements prepared on a "carve-out" basis as discussed below. The Company’s financial statements for the period from May 23, 2019 through December 28, 2019 were consolidated financial statements based on the reported results of Kontoor Brands, Inc. as a standalone company. The consolidated and combined financial statements and related disclosures are presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"). The Company’s consolidated and combined financial statements for all periods presented are referred to throughout this Annual Report on Form 10-K as “financial statements.” Basis of Presentation - Prior to the Separation Through the Separation date, the Company's combined financial statements were prepared on a carve-out basis under GAAP. These accompanying combined financial statements reflected the historical financial position, results of operations and cash flows of the Company for the periods presented, through the Separation date, as historically managed within VF. The combined financial statements were derived from the consolidated financial statements and accounting records of VF. The combined statements of income included costs for certain centralized functions and programs provided and administered by VF that were charged directly to the Company. These centralized functions and programs included, but were not limited to, information technology, human resources, accounting shared services, supply chain and insurance. In addition, for purposes of preparing these combined financial statements on a carve-out basis, a portion of VF's total corporate expenses were allocated to the Company. These expense allocations included the cost of corporate functions and resources provided by or administered by VF including, but not limited to, executive management, finance, accounting, legal, human resources and related benefit costs associated with such functions, such as stock-based compensation and pension. Allocations also included the cost of operating VF's corporate headquarters located in Greensboro, North Carolina. Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional revenues, cost of goods sold or square footage, as applicable. Management considered the basis on which the expenses were allocated to reasonably reflect the utilization of services provided to, or benefit received by, the Company during the periods presented. However, the allocations may not reflect the expenses that would have been incurred if the Company had been a standalone company for the periods presented. The combined financial statements included certain assets and liabilities that were historically held at the VF corporate level but were specifically identifiable or otherwise attributable to the Company. VF's third-party long-term debt and the related interest expense were not allocated to the Company for any of the periods presented as the Company was not the legal obligor of such debt. All intracompany transactions were eliminated. All transactions between the Company and VF were included in these financial statements. For those transactions between the Company and VF that were historically settled in cash, the Company reflected such balances in the balance sheets within "due from former parent" or "due to former parent." The aggregate net effect of transactions between the Company and VF that were not historically settled in cash were reflected in the balance sheets within "former parent investment" and in the statements of cash flows within "net transfers to former parent." Subsequent to the Separation, the Company continued to service commercial arrangements with VF, which included sales of VF-branded products at VF Outlet ™ stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018, none of which will continue in 2020. Income Taxes — Prior to the Separation, the Company's operations were included in VF’s U.S. federal consolidated and certain state income tax returns and certain foreign tax returns. For periods prior to the Separation, the income tax expense and deferred tax balances presented in the financial statements were calculated on a carve-out basis, which applied accounting guidance as if the Company filed its own tax returns in each jurisdiction and included tax losses and tax credits that may not reflect tax positions taken by VF. Certain tax attributes reported by the Company on a carve-out basis were not transferred to the Company as part of the Separation. These attributes primarily related to losses in certain Central America and South America ("CASA") jurisdictions. |
Use of Estimates | Use of Estimates In preparing the financial statements in accordance with GAAP, management makes estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. |
Foreign Currency Translation and Transaction | Foreign Currency Translation and Transactions The financial statements of most foreign subsidiaries are measured using the foreign currency as the functional currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using exchange rates in effect at the balance sheet dates, and revenues and expenses are translated at average exchange rates during the period. Resulting translation gains and losses are reported in other comprehensive income (loss) (“OCI”). The Company accounted for Argentina as highly inflationary from July 1, 2018 through the Separation as the projected three-year cumulative inflation rate exceeded 100%. At the Separation, the Company transitioned the Argentina market to a licensed model, which transacts in U.S dollars. |
Cash and Equivalents | Cash and Equivalents |
Accounts Receivable | Accounts Receivable, Net of Allowance for Doubtful Accounts Trade accounts receivable are recorded at invoiced amounts, less contractual allowances for trade terms, sales incentive programs and discounts. Royalty receivables are recorded at amounts earned based on the licensees’ sales of licensed products, subject in some cases to contractual minimum royalties due from individual licensees. The Company maintains an allowance for doubtful accounts for estimated losses that will result from the inability of customers and licensees to make required payments. The allowance is determined based on review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables considering the aging of balances, historical and anticipated trends, and current economic conditions. All accounts are subject to ongoing review of ultimate collectability. Receivables are written off against the allowance when it is probable the amounts will not be recovered. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method. Existence of physical inventory is verified through periodic physical inventory counts and ongoing cycle counts at most locations throughout the year. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is initially recorded at cost. The Company capitalizes improvements to property, plant and equipment that substantially extend the useful life of an asset, and interest cost incurred during construction of major assets. Depreciation is computed using the straight-line method over each asset's estimated useful life, ranging from three to ten years for machinery and equipment and up to 40 years for buildings. Amortization expense for leasehold improvements is recognized over the shorter of the estimated useful life or lease term and is included in depreciation and amortization expense. Repair and maintenance costs are expensed as incurred. |
Computer Software | Computer Software |
Intangible Assets, Long Lived Assets and Goodwill | Intangible Assets Intangible assets include trademarks, trade names and customer relationships. Trademark intangible assets represent individual acquired trademarks, some of which are registered in multiple countries. Customer relationship intangible assets are based on the value of relationships with wholesale customers in place at the time of acquisition. Intangible assets determined to have indefinite lives, consisting of major trademarks and trade names, are not amortized. Other intangible assets include customer relationships and trademarks determined to have a finite life, and are amortized over their estimated useful lives ranging from 15 to 16 years. Amortization of other intangible assets is computed using straight-line or accelerated methods consistent with the timing of the expected benefits to be received. Depreciation and amortization expense related to producing or otherwise obtaining finished goods inventories is reflected in the Company's income statement within "cost of goods sold" and all other depreciation and amortization expense is reflected within "selling, general and administrative expenses." Impairment of Long-lived Assets, Including Goodwill and Intangibles Property, Plant and Equipment and Finite-lived Intangible Assets — The Company’s policy is to review property, plant and equipment and amortizable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. If forecasted undiscounted cash flows to be generated by an asset are not expected to recover the asset’s carrying value, the estimated fair value is calculated, and an impairment charge is recorded to the extent that an asset’s carrying value exceeds its estimated fair value. Goodwill and Indefinite-lived Intangible Assets — The Company’s policy is to evaluate goodwill and indefinite-lived intangible assets for possible impairment as of the beginning of the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying value. The Company may first assess qualitative factors as a basis for determining whether it is necessary to perform quantitative impairment testing. If the Company determines that it is not more likely than not that the fair value of an asset or reporting unit is less than its carrying value, then no further testing is required. Otherwise, the assets must be quantitatively tested for possible impairment. An indefinite-lived intangible asset is quantitatively tested for possible impairment by comparing the estimated fair value of the asset with its carrying value. An impairment charge is recorded to the extent that the carrying value of the asset exceeds its estimated fair value. Goodwill is quantitatively tested for possible impairment by comparing the estimated fair value of a reporting unit with its carrying value, including the goodwill assigned to that reporting unit. An impairment charge is recorded to the extent that the carrying value of the reporting unit exceeds its estimated fair value. |
Lease And Rent Expense Policy | Leases and Rent Expense The Company enters into operating leases for offices, operational facilities, retail locations, vehicles and other assets that expire at various dates through 2031. Leases for real estate typically have initial terms ranging from 2 to 15 years, generally with renewal options. Leases for equipment typically have initial terms ranging from 3 to 7 years. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes and occupancy-related costs. Contingent rent is owed when sales at individual retail store locations exceed a stated base amount, and is recognized when the liability is probable. Rent expense for leases having rent abatements, landlord incentives or scheduled rent fluctuations is recorded on a straight-line basis over the lease term beginning on the lease commencement date, which is the date the underlying asset is made available to the Company. Lease terms may include optional renewals, terminations or purchases, which are considered in the Company’s assessments when such options are reasonably certain to be exercised. For retail real estate leases, the Company does not typically include renewal options in the underlying lease term. For non-retail real estate leases, when renewal options are reasonably certain to be exercised, the Company includes the renewal options in the underlying lease term, up to a maximum of ten years . Renewals for all other leases are determined on a lease-by-lease basis. Upon adoption of Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842),” the Company elected the package of practical expedients permitted under the new lease standard, which allowed the Company to carry forward its historical assessment of whether a contract contained a lease, how the lease was classified, and if initial direct costs could be capitalized. The Company elected to combine non-lease components with the related lease components for real estate, vehicles and other significant asset arrangements and aggregate the combined items as a single lease component for accounting purposes. For leases with a lease term of 12 months or less for all classes of underlying assets, the Company elected not to recognize a right-of-use asset and related lease liability. Certain of the Company’s leases contain fixed, indexed, or market-based escalation clauses which impact future payments. Certain arrangements contain variable payment provisions, such as payments based on sales volumes or amounts and mileage, or excess mileage. The Company’s leases typically contain customary covenants and restrictions. The Company determines whether a contract is a lease at inception. This typically requires more judgment in storage and service arrangements where the Company must determine whether its rights to specific physical or production capacity may represent substantially all of the available capacity. The Company measures right-of-use assets and related lease liabilities based on the present value of remaining lease payments, including in-substance fixed payments, the current payment amount when payments depend on an index or rate (e.g., inflation adjustments, market renewals), and the amount the Company believes is probable to be paid to the lessor under residual value guarantees, when applicable. Lease contracts may include fixed payments for non-lease components, such as maintenance, which are included in the measurement of lease liabilities for certain asset classes based on the Company’s election to combine lease and non-lease components. As applicable borrowing rates are not typically implied within our lease arrangements, the Company discounts lease payments based on its estimated incremental borrowing rate at lease commencement, or modification, which is based on the Company’s estimated credit rating, the lease term at commencement and the contract currency of the lease arrangement. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied based on the transfer of control of promised goods or services. The transfer of control typically occurs at a point in time based on consideration of when the customer has i) an obligation to pay for, ii) physical possession of, iii) legal title to, iv) risks and rewards of ownership of and v) accepted the goods or services. The timing of revenue recognition within the wholesale channels occurs either on shipment or delivery of goods based on contractual terms with the customer. The timing of revenue recognition in the direct-to-consumer channels typically occurs at the point of sale within Company-operated or concession retail stores and either on shipment or delivery of goods for e-commerce transactions based on contractual terms with the customer. For finished products shipped directly to customers from our suppliers, the Company’s promise to the customer is a performance obligation to provide the specified goods and the Company has discretion in establishing pricing. Thus, the Company is the principal in the arrangement and revenue is recognized on a gross basis at the transaction price. The duration of contractual arrangements with customers in our wholesale channels is typically less than one year. Payment terms with customers are typically between 30 and 60 days. The Company does not adjust the promised amount of consideration for the effects of a significant financing component as it is expected, at contract inception, that the period between the transfer of the promised good or service to the customer and the customer payment for the good or service will be one year or less. The amount of revenue recognized reflects the expected consideration to be received for providing the goods or services to the customer, which includes estimates for variable consideration. Variable consideration includes allowances for trade terms, sales incentive programs, discounts, markdowns, chargebacks and product returns. Estimates of variable consideration are determined at contract inception and reassessed at each reporting date, at a minimum, to reflect any changes in facts and circumstances. The Company utilizes the expected value method in determining its estimates of variable consideration, based on evaluations of specific product and customer circumstances, historical and anticipated trends, and current economic conditions. Revenue from the sale of gift cards is deferred and recorded as a contract liability until the gift card is redeemed by the customer, factoring in breakage as appropriate, which considers whether the Company has a legal obligation to remit the value of the unredeemed gift card to any jurisdiction under unclaimed property regulations. The VF Outlet™ stores maintain customer loyalty programs where customers earn rewards from qualifying purchases, which are redeemable for discounts on future purchases or other rewards. The Company estimates the standalone selling price of the loyalty rewards and allocates a portion of the consideration for the sale of products to the loyalty points earned. The deferred amount is recorded as a contract liability, and is recognized as revenue when the points are redeemed or when the likelihood of redemption is remote. The Company has elected to treat all shipping and handling activities as fulfillment costs and recognize the costs as selling, general and administrative expenses at the time the related revenue is recognized. Shipping and handling costs billed to customers are included in net revenues. Sales taxes and value added taxes collected from customers and remitted directly to governmental authorities are excluded from the transaction price. The Company has licensing agreements for its symbolic intellectual property, most of which include minimum guaranteed royalties. Royalty income is recognized as earned over the respective license term based on the greater of minimum guarantees or the licensees’ sales of licensed products at rates specified in the licensing contracts. Royalty income related to the minimum guarantees is recognized using a measure of progress with variable amounts recognized only when the cumulative earned royalty exceeds the minimum guarantees. As of December 2019 , the Company expects to recognize $27.8 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time through December 2024 . The variable consideration is not disclosed as a remaining performance obligation as the licensing arrangements qualify for the sales-based royalty exemption. Royalty income was included in net revenues in the statements of income and was $32.1 million , $32.7 million and $30.5 million in 2019, 2018 and 2017, respectively. The Company has applied the practical expedient to recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold for Company-manufactured goods includes all materials, labor and overhead costs incurred in the production process. Cost of goods sold for purchased finished goods includes the purchase costs and related overhead. In both cases, overhead includes all costs related to manufacturing or purchasing finished goods, including costs of planning, purchasing, quality control, depreciation, freight, duties, royalties paid to third parties and shrinkage. Cost of goods sold also includes restructuring charges. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses |
Derivative Financial Instruments | Derivative Financial Instruments Derivative financial instruments are measured at fair value in the Company's balance sheet. Unrealized gains and losses are recognized as assets and liabilities, respectively, and classified as current or noncurrent based on the derivatives’ maturity dates. The accounting for changes in the fair value of derivative instruments (i.e., gains and losses) depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. To qualify for hedge accounting treatment, all hedging relationships must be formally documented at the inception of the hedges and must be highly effective in offsetting changes in future cash flows of hedged transactions. Further, at the inception of a contract and on an ongoing basis, the Company assesses whether the hedging instruments are effective in offsetting the risk of the hedged transactions. Occasionally, a portion of a derivative instrument will be considered ineffective in hedging the originally identified exposure due to a decline in amount or a change in timing of the hedged exposure. In such cases, hedge accounting treatment is discontinued for the ineffective portion of that hedging instrument, and any change in fair value for the ineffective portion is recognized in net income. The Company does not use derivative instruments for trading or speculative purposes. Hedging cash flows are classified in the Company's statements of cash flows in the same category as the items being hedged. Hedging contracts are further described in Note 14 to the Company's financial statements. Cash Flow Hedges — The Company uses foreign currency exchange contracts primarily to hedge a portion of the exchange risk for its forecasted sales, purchases, intercompany service fees and royalties. The Company uses interest rate swap agreements to partially hedge the interest rate risk associated with the volatility of monthly LIBOR rate movements. Derivative Contracts Not Designated as Hedges — The Company uses derivative contracts to manage foreign currency exchange risk on accounts receivable and accounts payable. These contracts are not designated as hedges and are recorded at fair value in the Company's balance sheets. Changes in the fair values of these instruments are recognized directly in earnings. Gains or losses on these contracts largely offset the net transaction gains or losses on the related assets and liabilities. |
Self-insurance | Self-insurance The Company is self-insured for a significant portion of its employee medical, workers’ compensation, property and general liability exposures. Liabilities for self-insured exposures are accrued at the present value of amounts expected to be paid based on historical claims experience and actuarial data for forecasted settlements of claims filed and for incurred but not yet reported claims. Accruals for self-insured exposures are included in current and noncurrent liabilities based on the expected periods of payment. Excess liability insurance has been purchased to limit the amount of self-insured risk on claims. |
Income Taxes | Income Taxes Income taxes are provided on pre-tax income for financial reporting purposes. Deferred income tax assets and liabilities, as presented in the Company's balance sheets, reflect the net future tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Net temporary differences and net operating losses are recorded utilizing tax rates currently enacted for the years in which the differences are expected to be settled or realized. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits and changes in estimates and judgments used. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not (likelihood of more than 50%) that some portion, or all, of a deferred tax asset will not be realized. Accrued income taxes as presented in the Company's balance sheets include unrecognized income tax benefits along with related interest and penalties, appropriately classified as current or noncurrent. All deferred tax assets and liabilities are classified as noncurrent in the Company's balance sheets. The provision for income taxes as presented in the Company's statements of income also includes estimated interest and penalties related to uncertain tax positions. |
Former Parent Investment | Former Parent Investment "Former parent investment" in the balance sheet represented VF’s historical investment in the Company, the accumulated net earnings after taxes and the net effect of the transactions with and allocations from VF. See the Basis of Presentation — Prior to the Separation section above and Note 22 to the Company's financial statements for additional information. |
Concentration of Risks | Concentration of Risks The Company markets products to a broad customer base throughout the world. Products are sold at a range of price points through our wholesale and direct-to-consumer channels. The Company’s largest customer, a U.S.-based retailer, accounted for 34% of 2019 net revenues, and the top ten customers accounted for 53% of 2019 net revenues. Sales are typically made on an unsecured basis under customary terms that vary by product, channel of distribution or geographic region. The Company continuously monitors the creditworthiness of its customers and has established internal policies regarding customer credit limits. The Company is not aware of any issues with respect to relationships with any of its top customers. |
Legal and Other Contingencies | Legal and Other Contingencies Management periodically assesses liabilities and contingencies in connection with legal proceedings and other claims that may arise from time to time. When it is probable that a loss has been or will be incurred, an estimate of the loss is recorded in the financial statements. Estimates of losses are adjusted when additional information becomes available or circumstances change. A contingent liability is disclosed when there is at least a reasonable possibility that a material loss may have been incurred. Management believes that the outcome of any outstanding or pending matters, individually and in the aggregate, will not have a material adverse effect on the financial statements. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share assumes conversion of potentially dilutive securities such as stock options, restricted stock and restricted stock units. |
Reclassifications | Reclassifications Certain prior year amounts in the Company's financial statements and related disclosures have been reclassified to conform with the current year presentation. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards | Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued "Leases (Topic 842),” which requires entities to record most leased assets and liabilities on the balance sheet, and also retains a dual model approach for assessing lease classification and recognizing expense. The FASB subsequently issued updates to provide clarification on specific topics, including adoption guidance, practical expedients and interim transition disclosure requirements. This guidance was adopted by the Company during the first quarter of 2019 utilizing the optional transition method, which resulted in the recognition of operating lease right-of-use assets, operating lease liabilities and a $2.7 million cumulative effect adjustment to the 2019 beginning former parent investment in the Company's balance sheet. The adoption of these standards did not have a significant impact on the Company's statement of income and statement of cash flows. Refer to Note 19 to the Company's financial statements for additional information. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities," which amends and simplifies certain aspects of hedge accounting rules to better portray the economic results of risk management activities in the financial statements. The FASB has subsequently issued updates to the standard to provide additional guidance on specific topics. This guidance was adopted by the Company during the first quarter of 2019 and did not have a significant impact on the Company's financial statements. In February 2018, the FASB issued ASU 2018-02, " Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, " which addresses the effect of the change in the U.S. federal corporate income tax rate due to the enactment of the Tax Cuts and Jobs Act (the "Tax Act") on items within accumulated other comprehensive loss ("AOCL"). This guidance was adopted by the Company during the first quarter of 2019 and did not have a significant impact on the Company's financial statements. In July 2018, the FASB issued ASU 2018-09, "Codification Improvements," which provides technical corrections, clarifications and other improvements across a variety of accounting topics. The transition and effective date guidance is based on the facts and circumstances of each update, many of which became effective for the Company during the first quarter of 2019. The adoption of this guidance did not have a significant impact on the Company's financial statements. Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. This guidance is effective for the Company beginning in the first quarter of 2020. The Company has determined that the new guidance applies to our trade receivables. The Company has evaluated all applicable requirements and determined that the adoption of this guidance will not have a significant impact on our financial statements; however, we are implementing the appropriate enhancements within our procedures and controls environment, as applicable. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement," which modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. This guidance is effective for the Company beginning in the first quarter of 2020. The Company has evaluated all applicable requirements and determined that the adoption of this guidance will not have a significant impact on our financial statement disclosures. In August 2018, the FASB issued ASU 2018-14, "Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans," which modifies the disclosure requirements for employers who sponsor defined benefit pension or other postretirement plans. This guidance is effective for the Company beginning in the first quarter of 2020. The Company has evaluated all applicable requirements and determined that the adoption of this guidance will not have a significant impact on our financial statement disclosures. In August 2018, the FASB issued ASU 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for the Company beginning in the first quarter of 2020. The Company has evaluated all applicable requirements and determined that the adoption of this guidance will not have a significant impact on our financial statements as the new guidance is generally consistent with the Company's historical accounting policies. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which amends and simplifies the accounting for income taxes by removing certain exceptions in existing guidance and providing new guidance to reduce complexity in certain areas. This guidance is effective for the Company beginning in the first quarter of 2021 with early adoption permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its financial statements, which is not expected to be significant. |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table presents information about contract balances recorded in the Company's balance sheets: (In thousands) December 2019 December 2018 Accounts receivable, net $ 228,459 $ 252,966 Contract assets (a) 10,679 2,841 Contract liabilities (b) 1,775 2,311 (a) Included within "prepaid expenses and other current assets" in the Company's balance sheets. (b) Included within "accrued liabilities" in the Company's balance sheets. |
Disaggregation of Revenue | The following tables present revenues disaggregated by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues are affected by economic factors. Revenues from licensing arrangements have been included within the U.S. or Non-U.S. Wholesale channels, based on the respective region covered by the agreement. Branded Direct-to-Consumer revenues include the distribution of our products via concession retail locations internationally, Wrangler ® and Lee ® branded full-price stores globally and Company-owned outlet stores globally. The Branded Direct-to-Consumer channel also includes sales of our branded products in U.S.-based VF Outlet ™ stores and digital sales via www.wrangler.com and www.lee.com. The Other channel includes sales of third-party branded merchandise at VF Outlet™ stores and sales of products manufactured for third-parties. Sales of Wrangler ® and Lee ® branded products at VF Outlet™ stores are not included in Other and are reported in the Branded Direct-to-Consumer channel discussed above. The Other channel also includes transactions with VF for pre-Separation activities, none of which will continue going forward. These transactions include sales of VF-branded products at VF Outlet™ stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica ® brand business in mid-2018. Year Ended December 2019 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,198,303 $ 391,887 $ 22,137 $ 1,612,327 Non-U.S. Wholesale 213,905 314,882 1,585 530,372 Branded Direct-To-Consumer 105,904 175,507 27 281,438 Other — — 124,702 124,702 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 Geographic revenues U.S. $ 1,282,428 $ 481,050 $ 146,469 $ 1,909,947 International 235,684 401,226 1,982 638,892 Total $ 1,518,112 $ 882,276 $ 148,451 $ 2,548,839 Year Ended December 2018 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,224,218 $ 420,244 $ 30,100 $ 1,674,562 Non-U.S. Wholesale 263,675 357,471 — 621,146 Branded Direct-To-Consumer 114,313 182,528 — 296,841 Other — — 171,449 171,449 Total $ 1,602,206 $ 960,243 $ 201,549 $ 2,763,998 Geographic revenues U.S. $ 1,303,948 $ 509,160 $ 201,549 $ 2,014,657 International 298,258 451,083 — 749,341 Total $ 1,602,206 $ 960,243 $ 201,549 $ 2,763,998 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Segment Reporting [Abstract] | |
Financial Information for Reportable Segments | The following table presents financial information for the Company's reportable segments and income before income taxes: Year Ended December (In thousands) 2019 2018 2017 Segment revenues: Wrangler $ 1,518,112 $ 1,602,206 $ 1,619,252 Lee 882,276 960,243 1,005,774 Total reportable segment revenues 2,400,388 2,562,449 2,625,026 Other revenues 148,451 201,549 205,080 Total net revenues $ 2,548,839 $ 2,763,998 $ 2,830,106 Segment profit: Wrangler $ 215,008 $ 265,981 $ 280,257 Lee 68,214 92,756 107,246 Total reportable segment profit $ 283,222 $ 358,737 $ 387,503 Non-cash impairment of intangible asset (1) (32,636 ) — — Corporate and other expenses (90,117 ) (30,916 ) (32,676 ) Interest income from former parent, net 3,762 7,738 3,372 Interest expense (35,787 ) (1,173 ) (1,263 ) Interest income 3,931 5,740 2,984 Profit (loss) related to other revenues 2,819 (48 ) (767 ) Income before income taxes $ 135,194 $ 340,078 $ 359,153 (1) Represents an impairment charge in the third quarter of 2019 related to the Rock & Republic ® trademark. See Note 7 to the Company's financial statements. |
Reconciliation Assets | The following table presents assets (i.e. accounts receivable and inventories) for the Company's reportable segments and a reconciliation to total asset balances: (In thousands) December 2019 December 2018 Segment assets: Wrangler $ 378,041 $ 383,122 Lee 238,763 271,518 Total reportable segment assets 616,804 654,640 Other accounts receivable and inventories 69,756 72,138 Total segment assets $ 686,560 $ 726,778 Cash and equivalents 106,808 96,776 Due from former parent, current — 547,690 Notes receivable from former parent — 517,940 Prepaid expenses and other current assets 84,235 52,014 Due from former parent, noncurrent — 611 Property, plant, and equipment, net 132,192 138,449 Operating lease assets 86,582 — Goodwill and intangible assets 230,129 267,575 Deferred income taxes 79,551 42,891 Other assets 111,099 67,741 Total assets $ 1,517,156 $ 2,458,465 |
Supplemental Information (with Revenues by Geographic Area Based on Location of Customer) | The following table presents supplemental information of net revenues by geographic area based on the location of the customer: Year Ended December (In thousands) 2019 2018 2017 Revenues: U.S. $ 1,909,947 $ 2,014,657 $ 2,046,359 International 638,892 749,341 783,747 Total $ 2,548,839 $ 2,763,998 $ 2,830,106 The following table presents property, plant, and equipment by geographic location: (In thousands) December 2019 December 2018 Property, plant and equipment, net: U.S. $ 74,084 $ 80,551 International 58,108 57,898 Total $ 132,192 $ 138,449 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | (In thousands) December 2019 December 2018 Trade $ 230,588 $ 253,047 Royalty and other 9,723 10,468 Total accounts receivable 240,311 263,515 Less: allowance for doubtful accounts (11,852 ) (10,549 ) Accounts receivable, net $ 228,459 $ 252,966 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | (In thousands) December 2019 December 2018 Finished products $ 383,643 $ 396,345 Work-in-process 34,783 37,466 Raw materials 39,675 40,001 Total inventories $ 458,101 $ 473,812 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | (In thousands) December 2019 December 2018 Land and improvements $ 12,452 $ 13,279 Buildings and improvements 178,303 187,235 Machinery and equipment 402,417 415,682 Property, plant and equipment, at cost 593,172 616,196 Less: accumulated depreciation and amortization (460,980 ) (477,747 ) Property, plant and equipment, net $ 132,192 $ 138,449 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Indefinite Lived Intangible Assets | (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2019 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 46,058 $ 12,074 Customer relationships 15 years Accelerated 10,627 9,919 708 Finite-lived intangible assets, net 12,782 Indefinite-lived intangible assets: Trademarks and trade names 4,511 Intangible assets, net $ 17,293 (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2018 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 10,900 $ 47,232 Customer relationships 15 years Accelerated 10,743 9,530 1,213 Finite-lived intangible assets, net 48,445 Indefinite-lived intangible assets: Trademarks and trade names 4,614 Intangible assets, net $ 53,059 |
Finite Lived Intangible Assets | (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2019 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 46,058 $ 12,074 Customer relationships 15 years Accelerated 10,627 9,919 708 Finite-lived intangible assets, net 12,782 Indefinite-lived intangible assets: Trademarks and trade names 4,511 Intangible assets, net $ 17,293 (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount December 2018 Finite-lived intangible assets: Trademarks 16 years Straight-line $ 58,132 $ 10,900 $ 47,232 Customer relationships 15 years Accelerated 10,743 9,530 1,213 Finite-lived intangible assets, net 48,445 Indefinite-lived intangible assets: Trademarks and trade names 4,614 Intangible assets, net $ 53,059 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | The following table presents changes in goodwill summarized by reportable segment: (In thousands) Wrangler Lee Total Balance, December 2017 $ 135,288 $ 84,000 $ 219,288 Currency translation (2,944 ) (1,828 ) (4,772 ) Balance, December 2018 132,344 82,172 214,516 Currency translation (1,037 ) (643 ) (1,680 ) Balance, December 2019 $ 131,307 $ 81,529 $ 212,836 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Other Assets [Abstract] | |
Other Assets | The following table presents components of "other assets" as reflected in the Company's balance sheet: (In thousands) December 2019 December 2018 Investments held for deferred compensation plans (Note 12) $ 53,394 $ 34,957 Computer software, net of accumulated amortization of $3,592 in 2019 and $4,269 in 2018 29,532 3,308 Deposits 8,925 6,492 Partnership stores and shop-in-shop costs, net of accumulated amortization of $22,055 in 2019 and $23,344 in 2018 5,210 5,368 Other 14,038 17,616 Total other assets $ 111,099 $ 67,741 |
SHORT-TERM BORROWINGS AND LON_2
SHORT-TERM BORROWINGS AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Short-Term Borrowings | The following table presents the components of short-term borrowings as recorded in the Company's balance sheet: (In thousands) December 2019 December 2018 Revolving Credit Facility $ — $ — International borrowing arrangements 1,070 3,215 Short-term borrowings $ 1,070 $ 3,215 |
Schedule of Long-term Debt Instruments | The following table presents the components of long-term debt as recorded in the Company's balance sheet: (In thousands) December 2019 Term Loan A $ 695,111 Term Loan B 218,158 Total long-term debt 913,269 Less: current portion — Long-term debt, due beyond one year $ 913,269 |
Payments of Long-term Debt and Future Minimum Lease Payments | The following table presents scheduled payments of long-term debt as of December 2019 for the next five years and thereafter: (In thousands) Future Principal Payments 2020 $ — 2021 25,000 2022 37,500 2023 37,500 2024 600,000 Thereafter 223,000 923,000 Less: unamortized debt discount (2,050 ) Less: unamortized debt issuance costs (7,681 ) Total long-term debt 913,269 Less: current portion — Long-term debt, due beyond one year $ 913,269 |
ACCRUED AND OTHER LIABILITIES (
ACCRUED AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | The following table presents components of "accrued liabilities" as reflected in the Company's balance sheet: (In thousands) December 2019 December 2018 Customer discounts, allowances, and incentives $ 60,060 $ 45,220 Compensation 36,315 44,427 Other taxes 22,995 21,651 Professional services 14,005 5,069 Advertising 10,285 7,740 Customer deposits 9,273 10,106 Current income taxes payable 7,513 168 Deferred compensation (Note 12) 6,528 11,709 Insurance 2,789 4,192 Restructuring (Note 21) 2,172 21,169 Contract liabilities (Note 2) 1,775 2,311 Interest payable to former parent — 4,280 Other 21,034 16,186 Accrued liabilities $ 194,744 $ 194,228 The following table presents components of "other liabilities" as reflected in the Company's balance sheet: (In thousands) December 2019 December 2018 Deferred compensation (Note 12) $ 53,601 $ 34,957 Noncurrent income taxes payable 17,678 58,854 Pension liabilities (Note 12) 13,224 — Insurance 875 4,751 Restructuring (Note 21) — 2,080 Other 13,497 14,868 Other liabilities $ 98,875 $ 115,510 |
RETIREMENT AND SAVINGS BENEFI_2
RETIREMENT AND SAVINGS BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Retirement Benefits [Abstract] | |
Components of Pension Cost | The following table presents net pension costs recognized by the Company related to the Shared Plans through the Separation date: Year Ended December (In thousands) 2019 2018 2017 Service cost $ 726 $ 6,629 $ 6,929 Non-service components (3,166 ) (5,059 ) (181 ) Curtailment losses — 3,502 — Settlement losses — 1,188 — Net pension (benefit) costs $ (2,440 ) $ 6,260 $ 6,748 The following table presents key components of pension costs, amounts recorded in the balance sheet and related key assumptions: (In thousands) Year Ended December 2019 Amount included in the statement of income: Net pension costs - service costs $ 680 Actuarial assumptions used to determine pension expense: Discount rate in effect for determining service cost 1.28 % Rate of inflation 1.80 % Expected long-term return on plan assets 3.00 % Rate of compensation increase 3.00 % (In thousands) December 2019 Amount included in the balance sheet: Projected benefit obligations $ 20,651 Fair value of plan assets 7,427 Funded status - recorded in other liabilities (Note 11) $ 13,224 Accumulated other comprehensive loss, pretax - net deferred actuarial losses (3,068 ) Actuarial assumptions used to determine pension obligation: Discount rate 0.68 % Rate of compensation increase 3.00 % Accumulated benefit obligations $ 11,636 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Outstanding Derivatives on Individual Contract Basis | The following table presents the fair value of outstanding derivatives on an individual contract basis: December 2019 (In thousands) Fair Value of Derivatives with Unrealized Gains Fair Value of Derivatives with Unrealized Losses Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 5,199 $ (2,690 ) Interest rate swap agreements — (3,089 ) Derivatives not designated as hedging instruments: Foreign currency exchange contracts 364 (105 ) Total derivatives $ 5,563 $ (5,884 ) |
Derivative Assets and Liabilities Presented in Consolidated Balance Sheet Adjusted from current Gross | The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: December 2019 (In thousands) Derivative Asset Derivative Liability Gross amounts presented in the balance sheet $ 5,563 $ (5,884 ) Gross amounts not offset in the balance sheet (1,133 ) 1,133 Net amounts $ 4,430 $ (4,751 ) |
Derivative Assets and Liabilities Presented in Consolidated Balance Sheet Adjusted from current Gross | The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: December 2019 (In thousands) Derivative Asset Derivative Liability Gross amounts presented in the balance sheet $ 5,563 $ (5,884 ) Gross amounts not offset in the balance sheet (1,133 ) 1,133 Net amounts $ 4,430 $ (4,751 ) |
Derivatives Classified as Current or Noncurrent Based on Maturity Dates | The following table presents the location of derivatives in the Company's balance sheet, with current or noncurrent classification based on maturity dates: (In thousands) December 2019 Other current assets $ 4,303 Accrued liabilities (2,058 ) Other assets 1,260 Other liabilities (3,826 ) |
Effects of Cash Flow Hedging included in Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | The following tables present the effects of cash flow hedges included in the Company's statements of income and statements of comprehensive income: (In thousands) Gain (Loss) on Derivatives Recognized in OCI Cash Flow Hedging Relationships Year Ended December 2019 Foreign currency exchange contracts $ 3,683 Interest rate swap agreements (1,954 ) Total $ 1,729 (In thousands) Gain (Loss) Reclassified from AOCL into Income Location of Gain (Loss) Year Ended December 2019 Net revenues $ (844 ) Cost of goods sold 6,745 Other expense, net 343 Interest expense 1,136 Total $ 7,380 |
Effects of Fair Value Hedging Included in Consolidated Statements of Income | The following table presents a summary of these derivatives included in the Company's statement of income: (In thousands) Location of Gain (Loss) on Derivatives Recognized in Income Gain (Loss) on Derivatives Recognized in Income Derivatives Not Designated as Hedges Year Ended December 2019 Foreign currency exchange contracts Cost of goods sold $ 829 $ 829 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Classes of Financial Assets and Financial Liabilities Measured and Recorded at Fair Value on Recurring Basis | The following table presents financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis: Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2019 Financial assets: Cash equivalents: Money market funds $ 25,706 $ 25,706 $ — $ — Time deposits 4,788 4,788 — — Foreign currency exchange contracts 5,563 — 5,563 — Investment securities 59,922 56,437 3,485 — Financial liabilities: Foreign currency exchange contracts 2,795 — 2,795 — Interest rate swap agreements 3,089 — 3,089 — Deferred compensation 60,129 — 60,129 — Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2018 Financial assets: Cash equivalents: Money market funds $ 21,687 $ 21,687 $ — $ — Time deposits 2,518 2,518 — — Investment securities 46,666 46,666 — — Financial liabilities: Deferred compensation 46,666 — 46,666 — |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Equity [Abstract] | |
Deferred Components of OCI Reported, Net of Related Income Taxes, in Accumulated OCI in Stockholders' Equity and Changes in AOCI | The following table presents changes in AOCL and related tax impact: (In thousands) Foreign Currency Translation Defined Derivative Total Balance, December 2016 $ (148,088 ) $ — $ — $ (148,088 ) Other comprehensive income (loss) 26,682 — — 26,682 Tax benefit (expense) (1,076 ) — — (1,076 ) Net other comprehensive income (loss) 25,606 — — 25,606 Balance, December 2017 $ (122,482 ) $ — $ — $ (122,482 ) Other comprehensive income (loss) (22,700 ) — — (22,700 ) Net other comprehensive income (loss) (22,700 ) — — (22,700 ) Balance, December 2018 (145,182 ) — — (145,182 ) Other comprehensive income (loss) before reclassifications 3,167 (2,010 ) 1,729 2,886 Amounts reclassified from accumulated other comprehensive income (loss) — — (7,380 ) (7,380 ) Net other comprehensive income (loss) 3,167 (2,010 ) (5,651 ) (4,494 ) Amounts transferred from former parent 57,897 (1,058 ) 11,645 68,484 Tax benefit (expense) — 767 727 1,494 Balance, December 2019 $ (84,118 ) $ (2,301 ) $ 6,721 $ (79,698 ) The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) December 2019 December 2018 December 2017 Foreign currency translation $ (84,118 ) $ (145,182 ) $ (122,482 ) Defined benefit pension plans (2,301 ) — — Derivative financial instruments 6,721 — — Accumulated other comprehensive loss $ (79,698 ) $ (145,182 ) $ (122,482 ) |
Reclassifications Out of Accumulated OCI | The following table presents reclassifications out of AOCL: (In thousands) Year Ended December Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2019 2018 2017 Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ (844 ) $ — $ — Foreign currency exchange contracts Cost of goods sold 6,745 — — Foreign currency exchange contracts Other expense, net 343 — — Interest rate swap agreements Interest expense 1,136 — — Total before tax 7,380 — — Tax benefit (expense) Income taxes (706 ) — — Total reclassifications for the period, net of tax $ 6,674 $ — $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Total Stock-Based Compensation Cost and Associated Income Tax Benefits Related to Stock-Based Compensation Arrangements Recognized and Stock-Based Compensation Costs Included in Inventory | Year Ended December (In thousands) 2019 2018 2017 Stock-based compensation cost $ 23,844 $ 14,894 $ 13,021 Income tax benefits 5,011 3,692 4,844 |
Schedule of Assumption Used and Resulting Weighted Average Fair Value of Stock Option Granted | 2019 2018 2017 Expected volatility 25% to 27% 22% to 29 23% to 30 Weighted average expected volatility 26% 25% 24% Expected term (in years) 6.1 to 7.5 6.1 to 7.6 6.3 to 7.7 Weighted average dividend yield 2.5% 2.9% 2.8% Risk-free interest rate 2.5% to 2.8% 1.9% to 3.2 0.7% to 2.4 Weighted average fair value at date of grant $18.13 $15.40 $9.90 |
Stock Option Activity | The following table presents stock option activity from the Separation date to December 2019 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Converted Awards at May 23, 2019 1,835,236 25.77 6.4 $ 30,682 Exercised (113,548 ) 19.66 Forfeited/cancelled (5,666 ) 29.56 Outstanding at December 2019 1,716,022 26.16 6.6 $ 28,016 Exercisable at December 2019 1,085,556 25.71 6.0 $ 18,218 |
RSU Activity | The following table presents RSU and PRSU activity from the Separation date to December 2019 : Performance-based Nonperformance-based Number Outstanding Weighted Average Grant Date Fair Value Number Outstanding Weighted Average Grant Date Fair Value Converted Awards at May 23, 2019 82,542 31.00 240,111 30.26 Granted 422,359 32.27 378,645 32.52 Dividend equivalents — — 17,407 31.48 Issued as Common Stock — — (4,691 ) 25.00 Forfeited/canceled (604 ) 31.00 (4,596 ) 29.04 Outstanding at December 2019 504,297 32.06 626,876 31.71 Vested at December 2019 — — 45,034 34.11 |
Restricted Stock Activity | The following table presents RSA activity from the Separation date to December 2019 : Nonvested Shares Outstanding Weighted Average Grant Date Fair Value Converted Awards at May 23, 2019 273,531 25.11 Dividend equivalents 5,702 25.15 Vested (85,082 ) 25.02 Nonvested shares at December 2019 194,151 25.15 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes was Computed Based on Amounts of Income Before Income Taxes | The following table presents income before income taxes for which the provision for income taxes was computed: Year Ended December (In thousands) 2019 2018 2017 Domestic $ 61,691 $ 159,716 $ 169,160 Foreign 73,503 180,362 189,993 Income before income taxes $ 135,194 $ 340,078 $ 359,153 |
Provision for Income Taxes | The following table presents components of the provision for income taxes: Year Ended December (In thousands) 2019 2018 2017 Current: Federal $ 14,831 $ 29,670 $ 161,482 Foreign 23,017 32,501 31,444 State 4,866 12,303 13,546 Total current income taxes 42,714 74,474 206,472 Deferred: Federal and state (5,912 ) 4,067 36,009 Foreign 1,738 (1,536 ) 481 Total deferred income taxes (4,174 ) 2,531 36,490 Total provision for income taxes $ 38,540 $ 77,005 $ 242,962 |
Differences Between Income Taxes Computed by Applying Statutory Federal Income Tax Rate and Income Tax Expense reported in Consolidated Financial Statements | The following table presents a reconciliation of the differences between income taxes computed by applying the statutory federal income tax rate and income tax expense reported in the financial statements: Year Ended December (In thousands) 2019 2018 2017 Tax at federal statutory rate $ 28,391 $ 71,416 $ 125,703 State income taxes, net of federal tax benefit 2,476 10,532 5,788 Foreign rate differences (8,983 ) (5,125 ) (28,077 ) Tax reform 258 5,526 136,722 Stock-based compensation - federal (3,169 ) (2,692 ) (2,929 ) Adjustments to opening balances 1,928 — — Change in valuation allowance 17,025 (2,707 ) 5,120 GILTI 2,437 — — Change in indefinite reinvestment assertions (3,914 ) — — Other 2,091 55 635 Income taxes $ 38,540 $ 77,005 $ 242,962 |
Deferred Income Tax Assets and Liabilities | The following table presents the components of deferred income tax assets and liabilities: (In thousands) December 2019 December 2018 Deferred income tax assets: Inventories $ 7,811 $ 7,676 Deferred compensation 13,816 11,701 Other employee benefits 10,125 3,297 Stock-based compensation 8,076 6,243 Other accrued expenses 27,369 19,266 Intangible assets 21,356 7,541 Leases 20,219 — Operating loss carryforwards 9,779 23,702 Gross deferred income tax assets 118,551 79,426 Less: valuation allowance (16,699 ) (24,175 ) Net deferred income tax assets 101,852 55,251 Deferred income tax liabilities: Leases 19,417 — Depreciation 2,959 4,142 Taxes on unremitted earnings 2,163 9,702 Other deferred tax liabilities 221 1,195 Deferred income tax liabilities 24,760 15,039 Total net deferred income tax assets $ 77,092 $ 40,212 Amounts included in the balance sheets: Deferred income taxes - assets $ 79,551 $ 42,891 Deferred income taxes - liabilities (2,459 ) (2,679 ) $ 77,092 $ 40,212 |
Reconciliation of Change in Accrual for Unrecognized Income Tax Benefits | The following table presents a reconciliation of the change in the accrual for unrecognized income tax benefits: (In thousands) Unrecognized Accrued Unrecognized Income Tax Benefits Balance, December 2016 $ 48,842 $ 1,411 $ 50,253 Additions for current year tax positions 7,419 — 7,419 Additions for prior year tax positions 75 1,458 1,533 Reductions for prior year tax positions (418 ) (1 ) (419 ) Reductions due to statute expirations (4,655 ) (380 ) (5,035 ) Balance, December 2017 51,263 2,488 53,751 Additions for current year tax positions 2,458 8 2,466 Additions for prior year tax positions 6,286 2,870 9,156 Reductions for prior year tax positions (191 ) — (191 ) Reductions due to statute expirations (5,735 ) (427 ) (6,162 ) Balance, December 2018 54,081 4,939 59,020 Additions for current year tax positions 1,260 — 1,260 Additions for prior year tax positions 4,881 2,632 7,513 Reductions for prior year tax positions (3,680 ) (318 ) (3,998 ) Reductions due to statute expirations (674 ) (127 ) (801 ) Payments in settlement (205 ) (183 ) (388 ) Amounts transferred to former parent (41,986 ) (2,728 ) (44,714 ) Balance, December 2019 $ 13,677 $ 4,215 $ 17,892 |
Amounts Included in Consolidated Balance Sheets | (In thousands) December 2019 December 2018 Amounts included in the balance sheets: Unrecognized income tax benefits, including interest and penalties $ 17,892 $ 59,020 Less: deferred tax benefits (3,626 ) (7,724 ) Total unrecognized tax benefits $ 14,266 $ 51,296 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | The following table presents the computation of basic and diluted EPS: Year Ended December (In thousands, except per share amounts) 2019 2018 2017 Net income $ 96,654 $ 263,073 $ 116,191 Basic weighted average shares outstanding 56,688 56,648 56,648 Dilutive effect of stock-based awards 521 — — Diluted weighted average shares outstanding 57,209 56,648 56,648 Earnings per share: Basic earnings per share $ 1.71 $ 4.64 $ 2.05 Diluted earnings per share $ 1.69 $ 4.64 $ 2.05 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | The following table presents lease-related assets and liabilities recorded in the Company's balance sheet: (In thousands) December 2019 Assets Operating lease assets, noncurrent $ 86,582 Total lease assets $ 86,582 Liabilities Operating lease liabilities, current $ 35,389 Operating lease liabilities, noncurrent 54,746 Total lease liabilities $ 90,135 Weighted-average remaining lease term (in years) Operating leases 3.85 Weighted-average discount rate Operating leases 3.15 % |
Schedule of Lease Costs | The following table presents certain information related to lease costs for operating leases: (In thousands) Year Ended December 2019 Operating lease costs $ 37,743 Short-term lease costs (excluding leases of one month or less) 3,043 Variable lease costs 5,300 Total lease costs $ 46,086 The following table presents supplemental cash flow and non-cash information related to leases: (In thousands) Year Ended December 2019 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 46,239 Right-of-use assets obtained in exchange for new operating leases - non-cash activity $ 39,874 |
Schedule of Maturities of Operating Leases | The following table presents future maturities of operating lease liabilities as of December 2019 : (In thousands) Lease Obligations 2020 $ 36,711 2021 22,261 2022 11,979 2023 8,938 2024 5,222 Thereafter 6,574 Total future minimum lease payments 91,685 Less: amounts related to imputed interest (1,550 ) Present value of future minimum lease payments 90,135 Less: operating lease liabilities, current (35,389 ) Operating lease liabilities, noncurrent $ 54,746 |
Schedule of Future Minimum Rental Payments Under Previous Accounting Standard | The following table presents the future minimum lease payments during the noncancelable lease terms as of December 2018 , prior to the adoption of ASU 2016-02: (In thousands) December 2018 2019 $ 33,562 2020 29,246 2021 17,810 2022 7,932 2023 4,353 Thereafter 4,582 Total future minimum lease payments $ 97,485 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Components of Restructuring Charges | The following table presents the components of restructuring charges: Year Ended December (In thousands) 2019 2018 2017 Severance and employee-related benefits $ 14,903 $ 20,385 $ 9,541 Asset impairments 1,596 — — Inventory write-downs 4,403 — — Other 3,660 — — Total restructuring charges $ 24,562 $ 20,385 $ 9,541 The following table presents the restructuring charges by business segment: Year Ended December (In thousands) 2019 2018 2017 Wrangler $ 17,613 $ 13,358 $ 3,367 Lee 6,685 6,592 6,174 Other 264 435 — Total $ 24,562 $ 20,385 $ 9,541 |
Activity in Restructuring Accrual | The following table presents activity in the restructuring accrual for the periods ending December 2019 and December 2018: (In thousands) Severance Other Total Accrual at December 2017 $ 11,007 $ — $ 11,007 Charges 20,385 — 20,385 Cash payments (6,586 ) — (6,586 ) Adjustments to accruals (1,540 ) — (1,540 ) Currency translation (17 ) — (17 ) Accrual at December 2018 $ 23,249 $ — $ 23,249 Charges 14,903 3,660 18,563 Cash payments (31,201 ) (839 ) (32,040 ) Adjustments to accruals 1,663 — 1,663 Currency translation (58 ) (197 ) (255 ) Adjustment at Separation (6,384 ) (2,624 ) (9,008 ) Accrual at December 2019 $ 2,172 $ — $ 2,172 |
TRANSACTIONS WITH FORMER PARE_2
TRANSACTIONS WITH FORMER PARENT (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents components of the transfers to and from VF: (In thousands) December 2019 (a) December 2018 December 2017 General financing activities $ (723,155 ) $ (32,498 ) $ (436,910 ) Corporate allocations 47,903 113,581 146,042 Stock-based compensation expense 9,582 14,894 13,021 Pension (benefit) costs (2,246 ) 6,260 6,748 Purchases from parent 3,193 998 2,357 Sales to parent (13,988 ) (50,962 ) (45,483 ) Other income tax 10,863 64,150 97,121 Transition tax related to the Tax Act 3,937 5,716 110,562 Cash dividend to former parent (1,032,948 ) — — Total net transfers to former parent $ (1,696,859 ) $ 122,139 $ (106,542 ) (a) Activity reflected through the Separation date. The following table presents components of due from former parent, current: (In thousands) December 2019 December 2018 Sale of trade accounts receivable $ — $ 544,858 Hedging agreements with VF — 2,832 $ — $ 547,690 The following table presents components of due from former parent, noncurrent: (In thousands) December 2019 December 2018 Hedging agreements with VF $ — $ 611 The following table presents components of due to former parent, current: (In thousands) December 2019 December 2018 Sourcing payable $ — $ 16,140 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 28, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | (In thousands, except per share amounts) First (1) Second (2) Third (3) Fourth (4) Full (5) Year Ended December 2019 Net revenues $ 648,344 $ 609,746 $ 638,138 $ 652,611 $ 2,548,839 Operating income 25,195 53,520 31,028 58,547 168,290 Net income $ 15,413 $ 37,986 $ 14,502 $ 28,753 $ 96,654 Earnings per common share (5) Basic $ 0.27 $ 0.67 $ 0.26 $ 0.51 $ 1.71 Diluted 0.27 0.67 0.25 0.50 1.69 Dividends per common share $ — $ — $ 0.56 $ 0.56 $ 1.12 (In thousands, except per share amounts) First (1) Second (2) Third (3) Fourth (4) Full (5) Year Ended December 2018 Net revenues $ 669,663 $ 663,856 $ 704,246 $ 726,233 $ 2,763,998 Operating income 92,408 75,734 95,284 69,616 333,042 Net income $ 79,696 $ 60,458 $ 71,018 $ 51,902 $ 263,073 Earnings per common share (5) Basic $ 1.41 $ 1.07 $ 1.25 $ 0.92 $ 4.64 Diluted 1.41 1.07 1.25 0.92 4.64 Dividends per common share $ — $ — $ — $ — $ — (1) During the first quarter of 2019, the Company recorded costs of $36.6 million ( $33.4 million after-tax) related to cost optimization of business activities under restructuring programs (consisting primarily of severance and employee-related benefits) and the Separation and establishment of Kontoor as a standalone public company ("Separation costs"). During the first quarter of 2018, the Company recorded restructuring and Separation costs of $1.9 million ( $1.5 million after-tax). (2) During the second quarter of 2019, the Company recorded restructuring and Separation costs of $12.8 million ( $10.1 million after-tax). During the second quarter of 2018, the Company recorded restructuring and Separation costs of $2.0 million ( $1.7 million after-tax). (3) During the third quarter of 2019, the Company recorded restructuring and Separation costs of $19.4 million ( $14.9 million after-tax) and a non-cash impairment of intangible asset of $32.6 million ( $25.2 million after-tax) related to the Rock & Republic ® trademark intangible asset. During the third quarter of 2018, the Company recorded restructuring and Separation costs of $1.2 million ( $0.1 million after-tax). (4) During the fourth quarter of 2019, the Company recorded restructuring and Separation costs of $14.4 million ( $11.0 million after-tax) and additional expenses related to actions taken to exit certain points of distribution in India of $12.3 million ( $10.2 million after-tax). During the fourth quarter of 2018, the Company recorded restructuring and Separation costs of $23.4 million ( $18.4 million after-tax). (5) |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | May 23, 2019USD ($) | May 22, 2019 | May 17, 2019USD ($) | Dec. 28, 2019USD ($) | Dec. 29, 2018USD ($) | Dec. 30, 2017USD ($) | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2017USD ($) |
Property, Plant and Equipment [Line Items] | |||||||||
Spinoff transaction, conversion ratio | 0.1428571429 | ||||||||
Proceeds from issuance of long-term debt | $ 1,050,000 | $ 1,050,000 | $ 1,050,000 | $ 0 | $ 0 | ||||
Foreign currency transaction gains (losses), net of related hedging impact | 5,600 | (3,400) | (800) | ||||||
Cash equivalents | 30,500 | 24,200 | |||||||
Computer software, investment | 27,100 | ||||||||
Capitalized computer software | 29,532 | 3,308 | |||||||
Property, plant and equipment, at cost | 593,172 | 616,196 | |||||||
Net revenues | 2,548,839 | 2,763,998 | 2,830,106 | ||||||
Advertising expense | 119,300 | 127,800 | 137,300 | ||||||
Cooperate advertising expense | 5,900 | 7,200 | 9,400 | ||||||
Shipping and handling expense | 66,100 | 59,700 | 56,400 | ||||||
Royalty expenses | 1,800 | 1,300 | 1,800 | ||||||
Retained earnings | $ 1,718 | 0 | |||||||
Adoption of new accounting standard (ASU 2016-02) | $ (2,713) | $ 3,047 | $ (70,209) | ||||||
Net revenues | Customer Concentration Risk | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Concentration risk, percentage | 53.00% | ||||||||
Net revenues | Customer Concentration Risk | Largest Customer | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Concentration risk, percentage | 34.00% | ||||||||
Minimum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Estimated useful lives of intangible assets | 15 years | ||||||||
Maximum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Estimated useful lives of intangible assets | 16 years | ||||||||
Machinery and equipment | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, at cost | $ 402,417 | 415,682 | |||||||
Machinery and equipment | Minimum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Estimated useful lives of assets | 3 years | ||||||||
Machinery and equipment | Maximum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Estimated useful lives of assets | 10 years | ||||||||
Building | Maximum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Estimated useful lives of assets | 40 years | ||||||||
Software Development | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, at cost | $ 3,500 | ||||||||
Software Development | Minimum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Estimated useful lives of assets | 5 years | ||||||||
Software Development | Maximum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Estimated useful lives of assets | 10 years | ||||||||
Real Estate | Minimum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Term of contract | 2 years | ||||||||
Real Estate | Maximum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Term of contract | 15 years | ||||||||
Equipment | Minimum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Term of contract | 3 years | ||||||||
Equipment | Maximum | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Term of contract | 7 years | ||||||||
Former Parent Investment | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Adoption of new accounting standard (ASU 2016-02) | (2,713) | $ 3,047 | $ (70,209) | ||||||
Former Parent Investment | Accounting Standards Update 2016-02 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Adoption of new accounting standard (ASU 2016-02) | $ (2,700) | ||||||||
Royalty | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Net revenues | $ 32,100 | $ 32,700 | $ 30,500 | ||||||
Other Assets | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Capitalized computer software | $ 23,600 |
REVENUES - Contract Assets and
REVENUES - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 228,459 | $ 252,966 |
Contract assets | 10,679 | 2,841 |
Contract liabilities | $ 1,775 | $ 2,311 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-29 $ in Millions | Dec. 28, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 27.8 |
Remaining performance obligation, period | 5 years |
REVENUES - Additional Informati
REVENUES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability, revenue recognized | $ 1.9 | $ 1.7 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 2,548,839 | $ 2,763,998 | $ 2,830,106 |
Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,909,947 | 2,014,657 | |
International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 638,892 | 749,341 | |
Wholesale | Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,612,327 | 1,674,562 | |
Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 530,372 | 621,146 | |
Branded Direct-To-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 281,438 | 296,841 | |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 124,702 | 171,449 | |
Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,400,388 | 2,562,449 | 2,625,026 |
Operating Segments | Wrangler | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,518,112 | 1,602,206 | 1,619,252 |
Operating Segments | Wrangler | Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,282,428 | 1,303,948 | |
Operating Segments | Wrangler | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 235,684 | 298,258 | |
Operating Segments | Wrangler | Wholesale | Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,198,303 | 1,224,218 | |
Operating Segments | Wrangler | Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 213,905 | 263,675 | |
Operating Segments | Wrangler | Branded Direct-To-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 105,904 | 114,313 | |
Operating Segments | Wrangler | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | 0 | |
Operating Segments | Lee | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 882,276 | 960,243 | 1,005,774 |
Operating Segments | Lee | Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 481,050 | 509,160 | |
Operating Segments | Lee | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 401,226 | 451,083 | |
Operating Segments | Lee | Wholesale | Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 391,887 | 420,244 | |
Operating Segments | Lee | Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 314,882 | 357,471 | |
Operating Segments | Lee | Branded Direct-To-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 175,507 | 182,528 | |
Operating Segments | Lee | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | 0 | |
Operating Segments | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 148,451 | 201,549 | $ 205,080 |
Other | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 148,451 | 201,549 | |
Other | Other | Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 146,469 | 201,549 | |
Other | Other | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,982 | 0 | |
Other | Other | Wholesale | Domestic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 22,137 | 30,100 | |
Other | Other | Wholesale | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,585 | 0 | |
Other | Other | Branded Direct-To-Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 27 | 0 | |
Other | Other | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 124,702 | $ 171,449 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Financial Information for Reportable Segments (Details) - USD ($) | 3 Months Ended | 7 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 28, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||||||||||
Net revenues | $ 2,548,839,000 | $ 2,763,998,000 | $ 2,830,106,000 | |||||||||
Operating income | $ 58,547,000 | $ 31,028,000 | $ 53,520,000 | $ 25,195,000 | $ 69,616,000 | $ 95,284,000 | $ 75,734,000 | $ 92,408,000 | 168,290,000 | 333,042,000 | 357,418,000 | |
Non-cash impairment of intangible asset | $ (32,600,000) | (32,636,000) | 0 | 0 | ||||||||
Corporate and other expenses | (90,117,000) | (30,916,000) | (32,676,000) | |||||||||
Interest income from former parent, net | $ 3,800,000 | 3,762,000 | 7,738,000 | 3,372,000 | ||||||||
Interest expense | (35,787,000) | (1,173,000) | (1,263,000) | |||||||||
Interest income | 3,931,000 | 5,740,000 | 2,984,000 | |||||||||
Profit (loss) related to other revenues | (5,002,000) | (5,269,000) | (3,358,000) | |||||||||
Income before income taxes | 135,194,000 | 340,078,000 | 359,153,000 | |||||||||
Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenues | 2,400,388,000 | 2,562,449,000 | 2,625,026,000 | |||||||||
Non-cash impairment of intangible asset | (32,636,000) | 0 | 0 | |||||||||
Operating Segments | Wrangler | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenues | 1,518,112,000 | 1,602,206,000 | 1,619,252,000 | |||||||||
Operating income | 215,008,000 | 265,981,000 | 280,257,000 | |||||||||
Operating Segments | Lee | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenues | 882,276,000 | 960,243,000 | 1,005,774,000 | |||||||||
Operating income | 68,214,000 | 92,756,000 | 107,246,000 | |||||||||
Operating Segments | Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenues | 148,451,000 | 201,549,000 | 205,080,000 | |||||||||
Operating income | 283,222,000 | 358,737,000 | 387,503,000 | |||||||||
Corporate, Non-Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Interest income from former parent, net | 3,762,000 | 7,738,000 | 3,372,000 | |||||||||
Interest expense | (35,787,000) | (1,173,000) | (1,263,000) | |||||||||
Interest income | 3,931,000 | 5,740,000 | 2,984,000 | |||||||||
Profit (loss) related to other revenues | $ 2,819,000 | $ (48,000) | $ (767,000) |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Reconciliation Assets (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 1,517,156 | $ 2,458,465 |
Cash and equivalents | 106,808 | 96,776 |
Due from former parent, current | 0 | 547,690 |
Notes receivable from former parent | 0 | 517,940 |
Prepaid expenses and other current assets | 84,235 | 52,014 |
Due from former parent, noncurrent | 0 | 611 |
Operating lease assets | 90,135 | |
Deferred income taxes | 79,551 | 42,891 |
Other assets | 111,099 | 67,741 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 686,560 | 726,778 |
Operating Segments | Wrangler | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 378,041 | 383,122 |
Operating Segments | Lee | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 238,763 | 271,518 |
Operating Segments | Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 616,804 | 654,640 |
Other accounts receivable and inventories | 69,756 | 72,138 |
Corporate, Non-Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Cash and equivalents | 106,808 | 96,776 |
Due from former parent, current | 0 | 547,690 |
Notes receivable from former parent | 0 | 517,940 |
Prepaid expenses and other current assets | 84,235 | 52,014 |
Due from former parent, noncurrent | 0 | 611 |
Property, plant, and equipment, net | 132,192 | 138,449 |
Operating lease assets | 86,582 | 0 |
Goodwill and intangible assets | 230,129 | 267,575 |
Deferred income taxes | 79,551 | 42,891 |
Other assets | $ 111,099 | $ 67,741 |
BUSINESS SEGMENT INFORMATION _3
BUSINESS SEGMENT INFORMATION - Supplemental Information (with Revenues by Geographic Area Based on Location of Customer) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | $ 652,611 | $ 638,138 | $ 609,746 | $ 648,344 | $ 726,233 | $ 704,246 | $ 663,856 | $ 669,663 | $ 2,548,839 | $ 2,763,998 | $ 2,830,106 | |
Property, plant and equipment, net | $ 132,192 | $ 138,449 | 132,192 | 138,449 | 132,192 | $ 138,449 | ||||||
Domestic | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 1,909,947 | 2,014,657 | 2,046,359 | |||||||||
Property, plant and equipment, net | 74,084 | 80,551 | ||||||||||
International | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | $ 638,892 | $ 749,341 | 783,747 | |||||||||
Property, plant and equipment, net | $ 58,108 | $ 57,898 |
BUSINESS SEGMENT INFORMATION _4
BUSINESS SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Segment Reporting [Abstract] | |||
Customer accounted for 10% of total revenue | 34.00% | 32.00% | 33.00% |
ACCOUNTS RECEIVABLE - Component
ACCOUNTS RECEIVABLE - Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 240,311 | $ 263,515 |
Less: allowance for doubtful accounts | (11,852) | (10,549) |
Accounts receivable, net | 228,459 | 252,966 |
Trade | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 230,588 | 253,047 |
Royalty and other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 9,723 | $ 10,468 |
ACCOUNTS RECEIVABLE - Narrative
ACCOUNTS RECEIVABLE - Narrative (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Receivables [Abstract] | |||
Maximum amount of accounts receivable sold at any point in time | $ 377.5 | ||
Sale of accounts receivable | 1,035.4 | $ 1,057 | $ 1,101.1 |
Decrease in receivables related to balances sold | 188.1 | 544.9 | |
Funding fee | $ 5.3 | $ 5.1 | $ 3.6 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 39,675 | $ 396,345 |
Work-in-process | 34,783 | 37,466 |
Raw materials | 383,643 | 40,001 |
Total inventories | $ 458,101 | $ 473,812 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Detail) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, at cost | $ 593,172 | $ 616,196 | ||
Less: accumulated depreciation and amortization | (460,980) | (477,747) | ||
Property, plant and equipment, net | 132,192 | 138,449 | $ 132,192 | $ 138,449 |
Land and improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, at cost | 12,452 | 13,279 | ||
Buildings and improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, at cost | 178,303 | 187,235 | ||
Machinery and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, at cost | $ 402,417 | $ 415,682 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 22.3 | $ 23.8 | $ 26.1 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, net carrying amount | $ 12,782 | $ 48,445 |
Indefinite-lived intangible assets | 4,511 | 4,614 |
Intangible assets, net | $ 17,293 | $ 53,059 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, weighted average amortization period (in years) | 16 years | 16 years |
Amortizable intangible assets, cost | $ 58,132 | $ 58,132 |
Amortizable intangible assets, accumulated amortization | 46,058 | 10,900 |
Amortizable intangible assets, net carrying amount | $ 12,074 | $ 47,232 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, weighted average amortization period (in years) | 15 years | 15 years |
Amortizable intangible assets, cost | $ 10,627 | $ 10,743 |
Amortizable intangible assets, accumulated amortization | 9,919 | 9,530 |
Amortizable intangible assets, net carrying amount | $ 708 | $ 1,213 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of indefinite lived intangible assets | $ 32,600,000 | $ 0 | |
Amortization of intangible assets | 3,000,000 | $ 4,200,000 | $ 4,200,000 |
Estimated amortization expense, 2020 | 1,400,000 | ||
Estimated amortization expense, 2021 | 1,200,000 | ||
Estimated amortization expense, 2022 | 1,100,000 | ||
Estimated amortization expense, 2023 | 1,000,000 | ||
Estimated amortization expense, 2024 | $ 1,000,000 |
GOODWILL - Changes in Goodwill
GOODWILL - Changes in Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 214,516 | $ 219,288 |
Currency translation | (1,680) | (4,772) |
Goodwill, ending balance | 212,836 | 214,516 |
Wrangler | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 132,344 | 135,288 |
Currency translation | (1,037) | (2,944) |
Goodwill, ending balance | 131,307 | 132,344 |
Lee | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 82,172 | 84,000 |
Currency translation | (643) | (1,828) |
Goodwill, ending balance | $ 81,529 | $ 82,172 |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Goodwill [Line Items] | |||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 |
OTHER ASSETS (Detail)
OTHER ASSETS (Detail) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Other Assets [Abstract] | ||
Investments held for deferred compensation plans (Note 12) | $ 53,394 | $ 34,957 |
Computer software, net of accumulated amortization of $3,592 in 2019 and $4,269 in 2018 | 29,532 | 3,308 |
Deposits | 8,925 | 6,492 |
Partnership stores and shop-in-shop costs, net of accumulated amortization of $22,055 in 2019 and $23,344 in 2018 | 5,210 | 5,368 |
Other | 14,038 | 17,616 |
Total other assets | 111,099 | 67,741 |
Partnership stores and shop in shop costs, accumulated amortization | 22,055 | 23,344 |
Capitalized computer software, accumulated amortization | $ 3,592 | $ 4,269 |
SHORT-TERM BORROWINGS AND LON_3
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Additional Information (Details) - USD ($) | May 23, 2019 | May 17, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 |
Short-term Debt [Line Items] | |||||
Proceeds from issuance of long-term debt | $ 1,050,000,000 | $ 1,050,000,000 | $ 1,050,000,000 | $ 0 | $ 0 |
Line of credit facility, amount outstanding | 1,550,000,000 | ||||
Short-term borrowings | $ 1,070,000 | 3,215,000 | |||
Commitment fee | 0.75% | ||||
Commitment fee percentage | 0.30% | ||||
Payments on long-term debt | $ 127,000,000 | 0 | $ 0 | ||
Revolving Credit Facility | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | 500,000,000 | ||||
Debt instrument, term | 5 years | ||||
Credit facility amount available for borrowing | $ 498,700,000 | ||||
Short-term borrowings | 0 | 0 | |||
Letter of Credit | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | 75,000,000 | ||||
Long-term line of credit | 1,300,000 | ||||
International borrowing arrangements | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | 47,800,000 | 35,900,000 | |||
Short-term borrowings | $ 1,070,000 | $ 3,215,000 | |||
Term Loan A | Term Loan | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | 750,000,000 | ||||
Debt instrument, term | 5 years | ||||
Long-term debt | $ 700,000,000 | ||||
Effective annual interest rate | 3.70% | ||||
Payments on long-term debt | $ 50,000,000 | ||||
Term Loan B | Term Loan | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | $ 300,000,000 | ||||
Debt instrument, term | 7 years | ||||
Long-term debt | $ 223,000,000 | ||||
Effective annual interest rate | 6.40% | ||||
Payments on long-term debt | $ 77,000,000 | ||||
Base Rate | Term Loan A | Term Loan | |||||
Short-term Debt [Line Items] | |||||
Basis spread | 1.75% | ||||
Base Rate | Term Loan B | Term Loan | |||||
Short-term Debt [Line Items] | |||||
Basis spread | 3.25% | ||||
LIBOR | |||||
Short-term Debt [Line Items] | |||||
Basis spread | 1.75% | ||||
LIBOR | Term Loan A | Term Loan | |||||
Short-term Debt [Line Items] | |||||
Basis spread | 0.75% | ||||
LIBOR | Term Loan B | Term Loan | |||||
Short-term Debt [Line Items] | |||||
Basis spread | 4.25% | ||||
Minimum | LIBOR | |||||
Short-term Debt [Line Items] | |||||
Basis spread | 0.00% |
SHORT-TERM BORROWINGS AND LON_4
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Short-term borrowings (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Short-term Debt [Line Items] | ||
Short-term borrowings | $ 1,070 | $ 3,215 |
Revolving Credit Facility | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | 0 | 0 |
International borrowing arrangements | ||
Short-term Debt [Line Items] | ||
Short-term borrowings | $ 1,070 | $ 3,215 |
SHORT-TERM BORROWINGS AND LON_5
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 913,269 | |
Less: current portion | 0 | |
Long-term debt, due beyond one year | 913,269 | $ 0 |
Term Loan A | Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 695,111 | |
Term Loan B | Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 218,158 |
SHORT-TERM BORROWINGS AND LON_6
SHORT-TERM BORROWINGS AND LONG-TERM DEBT SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Schedule of payments of long-term debt (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Debt Disclosure [Abstract] | ||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 25,000 | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 37,500 | |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 37,500 | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 600,000 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 223,000 | |
Notes Payable | 923,000 | |
Less: unamortized debt discount | (2,050) | |
Less: unamortized debt issuance costs | (7,681) | |
Total long-term debt | 913,269 | |
Less: current portion | 0 | |
Long-term debt, due beyond one year | $ 913,269 | $ 0 |
ACCRUED AND OTHER LIABILITIES A
ACCRUED AND OTHER LIABILITIES Accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Accrued Liabilities [Abstract] | ||
Customer discounts, allowances, and incentives | $ 60,060 | $ 45,220 |
Compensation | 36,315 | 44,427 |
Other taxes | 22,995 | 21,651 |
Professional services | 14,005 | 5,069 |
Advertising | 10,285 | 7,740 |
Customer deposits | 9,273 | 10,106 |
Current income taxes payable | 7,513 | 168 |
Deferred compensation (Note 12) | 6,528 | 11,709 |
Insurance | 2,789 | 4,192 |
Restructuring (Note 21) | 2,172 | 21,169 |
Contract liabilities (Note 2) | 1,775 | 2,311 |
Interest payable to former parent | 0 | 4,280 |
Other | 21,034 | 16,186 |
Accrued liabilities | $ 194,744 | $ 194,228 |
ACCRUED AND OTHER LIABILITIES O
ACCRUED AND OTHER LIABILITIES Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | May 23, 2019 | Dec. 29, 2018 |
Payables and Accruals [Abstract] | |||
Deferred compensation (Note 12) | $ 53,601 | $ 11,000 | $ 34,957 |
Noncurrent income taxes payable | 17,678 | 58,854 | |
Pension liabilities (Note 12) | 13,224 | 0 | |
Insurance | 875 | 4,751 | |
Restructuring (Note 21) | 0 | 2,080 | |
Other | 13,497 | 14,868 | |
Other liabilities | $ 98,875 | $ 115,510 |
RETIREMENT AND SAVINGS BENEFI_3
RETIREMENT AND SAVINGS BENEFIT PLANS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | May 23, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Curtailments charges | $ 0 | $ 3,502 | $ 0 | |
Deferred compensation | 53,601 | 34,957 | $ 11,000 | |
Accumulated other comprehensive loss, pretax - net deferred actuarial losses | 2,301 | 0 | 0 | (1,100) |
Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets, Plan Assets | 6,400 | |||
Defined Benefit Plan, Pension Plan with Projected Benefit Obligation in Excess of Plan Assets, Projected Benefit Obligation | $ 17,400 | |||
Current liability to participants of the deferred compensation plans | 14,005 | 5,069 | ||
Deferred compensation | 60,129 | 46,666 | ||
Other Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Deferred compensation liability, current and noncurrent | 59,900 | 46,700 | ||
Current liability to participants of the deferred compensation plans | 6,500 | 11,700 | ||
Liability to participants of the deferred compensation plans, expected to be paid beyond one year | 53,400 | 35,000 | ||
Fair value of investments | 59,900 | 46,700 | ||
Deferred compensation plans expense | 7,900 | 11,000 | $ 10,200 | |
Other Current Assets | Other Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of investments | 6,500 | 11,700 | ||
Other Assets | Other Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of investments | 53,400 | 35,000 | ||
Former Parent Investment | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Curtailments charges | (3,500) | |||
Lump-sum distribution | 1,200 | |||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Deferred compensation | $ 60,129 | 46,666 | ||
Level 2 | Director | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Deferred compensation | $ 200 |
RETIREMENT AND SAVINGS BENEFI_4
RETIREMENT AND SAVINGS BENEFIT PLANS - Components of Pension Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Retirement Benefits [Abstract] | |||
Amount included in the statement of income: | $ 726 | $ 6,629 | $ 6,929 |
Net pension costs - service costs | (3,166) | (5,059) | (181) |
Amount included in the balance sheet: | 0 | 3,502 | 0 |
Rate of compensation increase | 0 | 1,188 | 0 |
Net pension (benefit) costs | $ (2,440) | $ 6,260 | $ 6,748 |
RETIREMENT AND SAVINGS BENEFI_5
RETIREMENT AND SAVINGS BENEFIT PLANS - Reconciliation of Changes in Fair Value of Defined Benefit Plan Assets and Projected Benefit Obligations (Details) $ in Thousands | 12 Months Ended |
Dec. 28, 2019USD ($) | |
Amount included in the statement of income: | |
Service cost | $ 680 |
Actuarial assumptions used to determine pension expense: | |
Discount rate in effect for determining service cost | 1.28% |
Discount rate in effect for determining interest cost | 1.80% |
Expected long-term return on plan assets | 3.00% |
Rate of compensation increase | 3.00% |
Amounts included in Consolidated Balance Sheets: | |
Projected benefit obligations | $ 20,651 |
Fair value of plan assets | 7,427 |
Other liabilities (Note 11) | (13,224) |
Accumulated other comprehensive loss, pretax - net deferred actuarial losses | $ (3,068) |
Actuarial assumptions used to determine pension obligation: | |
Discount rate | 0.68% |
Rate of compensation increase | 3.00% |
Accumulated benefit obligations | $ 11,636 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 28, 2019USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Cash flow hedge gain (loss) to be reclassified during next 12 months | $ 7.4 |
Foreign currency exchange contracts | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, notional amounts | $ 341.6 |
Derivative, term of contract | 20 months |
Estimated net amount to be transferred | $ 11.6 |
Interest rate swap agreements | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, notional amounts | $ 475 |
FAIR VALUE MEASUREMENTS - Class
FAIR VALUE MEASUREMENTS - Classes of Financial Assets and Financial Liabilities Measured and Recorded at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Cash equivalents: | ||
Cash equivalents, money market funds | $ 25,706 | $ 21,687 |
Cash equivalents, time deposits | 4,788 | 2,518 |
Derivative assets | 5,563 | |
Investment securities | 59,922 | 46,666 |
Financial liabilities: | ||
Derivative liability | 5,884 | |
Deferred compensation | 60,129 | 46,666 |
Level 1 | ||
Cash equivalents: | ||
Cash equivalents, money market funds | 25,706 | 21,687 |
Cash equivalents, time deposits | 4,788 | 2,518 |
Derivative assets | 0 | |
Investment securities | 56,437 | 46,666 |
Financial liabilities: | ||
Deferred compensation | 0 | 0 |
Level 2 | ||
Cash equivalents: | ||
Cash equivalents, money market funds | 0 | 0 |
Cash equivalents, time deposits | 0 | 0 |
Derivative assets | 5,563 | |
Investment securities | 3,485 | 0 |
Financial liabilities: | ||
Deferred compensation | 60,129 | 46,666 |
Level 3 | ||
Cash equivalents: | ||
Cash equivalents, money market funds | 0 | 0 |
Cash equivalents, time deposits | 0 | 0 |
Derivative assets | 0 | |
Investment securities | 0 | 0 |
Financial liabilities: | ||
Deferred compensation | 0 | $ 0 |
Foreign currency exchange contracts | ||
Financial liabilities: | ||
Derivative liability | 2,795 | |
Foreign currency exchange contracts | Level 1 | ||
Financial liabilities: | ||
Derivative liability | 0 | |
Foreign currency exchange contracts | Level 2 | ||
Financial liabilities: | ||
Derivative liability | 2,795 | |
Foreign currency exchange contracts | Level 3 | ||
Financial liabilities: | ||
Derivative liability | 0 | |
Interest rate swap agreements | ||
Financial liabilities: | ||
Derivative liability | 3,089 | |
Interest rate swap agreements | Level 1 | ||
Financial liabilities: | ||
Derivative liability | 0 | |
Interest rate swap agreements | Level 2 | ||
Financial liabilities: | ||
Derivative liability | 3,089 | |
Interest rate swap agreements | Level 3 | ||
Financial liabilities: | ||
Derivative liability | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding Derivatives on Individual Contract Basis at Gross Amounts (Details) $ in Thousands | Dec. 28, 2019USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral Including Not Subject To Master Netting Arrangement | $ 5,563 |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral Including Not Subject To Master Netting Arrangement | (5,884) |
Foreign currency exchange contracts | Derivatives designated as hedging instruments: | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | 5,199 |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | (2,690) |
Foreign currency exchange contracts | Derivatives not designated as hedging instruments: | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value | 364 |
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value | (105) |
Interest rate swap agreements | Derivatives designated as hedging instruments: | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | 0 |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | $ (3,089) |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 28, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | Jun. 29, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total long-term debt | $ 913,269,000 | ||||
Fair values and undiscounted cash flows | $ 49,000,000 | ||||
Non-cash impairment of intangible asset | $ 32,600,000 | 32,636,000 | $ 0 | $ 0 | |
Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, fair values | $ 906,100,000 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Fair Value of Derivative Assets and Liabilities in Balance Sheet (Details) $ in Thousands | Dec. 28, 2019USD ($) |
December 2019 | |
Gross amounts presented in the Consolidated Balance Sheets, Derivative Asset | $ 5,563 |
Gross amounts not offset in the Consolidated Balance Sheets, Derivative Asset | (1,133) |
Net amounts | 4,430 |
Derivative Liability | |
Gross amounts presented in the Consolidated Balance Sheets, Derivative Liabilities | (5,884) |
Gross amounts not offset in the Consolidated Balance Sheets, Derivative Liabilities | 1,133 |
Net amounts | $ (4,751) |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivatives Classified as Current or Noncurrent Based on Maturity Dates (Details) $ in Thousands | Dec. 28, 2019USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Other current assets | $ 4,303 |
Accrued liabilities | (2,058) |
Other assets | 1,260 |
Other liabilities | $ (3,826) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Cash Flow Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Derivative [Line Items] | |||
Gains arising during the period | $ 1,729 | $ 0 | $ 0 |
Foreign currency exchange contracts | |||
Derivative [Line Items] | |||
Gains arising during the period | 3,683 | ||
Interest rate swap agreements | |||
Derivative [Line Items] | |||
Gains arising during the period | $ (1,954) |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Location of gain (loss) (Details) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income | $ 7,380 | $ 0 | $ 0 |
Net revenues | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income | (844) | ||
Cost of goods sold | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income | 6,745 | ||
Other expense, net | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income | 343 | ||
Interest expense | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from AOCL into Income | $ 1,136 |
DERIVATIVE FINANCIAL INSTRUME_9
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Hedges Included in Consolidated Statements of Income (Details) - Not Designated as Hedging Instrument $ in Thousands | 12 Months Ended |
Dec. 28, 2019USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Gain (Loss) on Derivatives Recognized in Income | $ 829 |
Cost of goods sold | Foreign currency exchange contracts | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Gain (Loss) on Derivatives Recognized in Income | $ 829 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Narrative (Details) - $ / shares | Dec. 28, 2019 | Dec. 29, 2018 |
Equity [Abstract] | ||
Common Stock, stated value (in USD per share) | $ 0 | $ 0 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Deferred Components of OCI Reported, Net of Related Income Taxes, in Accumulated OCI in Stockholders' Equity (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | May 23, 2019 | Dec. 29, 2018 | Dec. 30, 2017 |
Equity [Abstract] | ||||
Foreign currency translation | $ (84,118) | $ (145,182) | $ (122,482) | |
Defined benefit pension plans | (2,301) | $ 1,100 | 0 | 0 |
Derivative financial instruments | 6,721 | 0 | 0 | |
Accumulated other comprehensive loss | $ (79,698) | $ (145,182) | $ (122,482) |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated OCI, Net of Related Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,723,452 | $ 1,357,893 | $ 1,392,847 |
Other comprehensive income (loss) | 3,167 | (22,700) | 26,682 |
Tax benefit (expense) | 0 | 0 | (1,076) |
Other comprehensive income (loss) | 2,886 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (7,380) | ||
Total other comprehensive income (loss), net of related taxes | (4,494) | (22,700) | 25,606 |
Amounts transferred from former parent | (1,696,859) | 122,139 | (106,542) |
Tax benefit (expense) | 1,494 | ||
Ending balance | 69,257 | 1,723,452 | 1,357,893 |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (145,182) | (122,482) | (148,088) |
Other comprehensive income (loss) | (22,700) | 26,682 | |
Tax benefit (expense) | (1,076) | ||
Other comprehensive income (loss) | 3,167 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | ||
Total other comprehensive income (loss), net of related taxes | 3,167 | (22,700) | 25,606 |
Amounts transferred from former parent | 57,897 | ||
Tax benefit (expense) | 0 | ||
Ending balance | (84,118) | (145,182) | (122,482) |
Defined Benefit Pension Plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 | |
Tax benefit (expense) | 0 | ||
Other comprehensive income (loss) | (2,010) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | ||
Total other comprehensive income (loss), net of related taxes | (2,010) | 0 | 0 |
Amounts transferred from former parent | (1,058) | ||
Tax benefit (expense) | 767 | ||
Ending balance | (2,301) | 0 | 0 |
Derivative Financial Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 | |
Tax benefit (expense) | 0 | ||
Other comprehensive income (loss) | 1,729 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (7,380) | ||
Total other comprehensive income (loss), net of related taxes | (5,651) | 0 | 0 |
Amounts transferred from former parent | 11,645 | ||
Tax benefit (expense) | 727 | ||
Ending balance | 6,721 | 0 | 0 |
AOCI Attributable to Parent | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (145,182) | (122,482) | (148,088) |
Amounts transferred from former parent | 68,484 | ||
Ending balance | $ (79,698) | $ (145,182) | $ (122,482) |
ACCUMULATED OTHER COMPREHENSI_6
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassification Out of Accumulated OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net revenues | $ 2,548,839 | $ 2,763,998 | $ 2,830,106 |
Other expense, net | 5,002 | 5,269 | 3,358 |
Total before tax | 135,194 | 340,078 | 359,153 |
Income taxes | (38,540) | (77,005) | (242,962) |
Total reclassifications for the period, net of tax | 6,674 | 0 | 0 |
Gains (losses) on derivative financial instruments | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 7,380 | 0 | 0 |
Income taxes | (706) | 0 | 0 |
Gains (losses) on derivative financial instruments | Foreign currency exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net revenues | (844) | 0 | 0 |
Cost of goods sold | 6,745 | 0 | 0 |
Other expense, net | 343 | 0 | 0 |
Gains (losses) on derivative financial instruments | Interest rate swap agreements | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | $ 1,136 | $ 0 | $ 0 |
STOCK-BASED COMPENSATION - Tota
STOCK-BASED COMPENSATION - Total Stock-Based Compensation Cost and Associated Income Tax Benefits Related to Stock-Based Compensation Arrangements Recognized and Stock-Based Compensation Costs Included in Inventory (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock-based compensation cost | $ 23,844 | $ 14,894 | $ 13,021 |
Income tax benefits | $ 5,011 | $ 3,692 | $ 4,844 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands | May 23, 2019USD ($)shares | Sep. 28, 2019shares | Dec. 28, 2019USD ($)shares | Dec. 28, 2019USD ($)$ / sharesshares | Dec. 28, 2019USD ($)$ / sharesshares | Dec. 29, 2018USD ($)$ / shares | Dec. 30, 2017USD ($)$ / shares | May 20, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum number of shares authorized (in shares) | 7,500,000 | |||||||
Shares available for future grant (in shares) | 6,600,000 | 6,600,000 | 6,600,000 | |||||
Shares issued in period (in shares) | 2,400,000 | |||||||
Conversion ratio | 2.425563 | |||||||
Stock-based compensation | $ | $ 23,844 | $ 14,894 | $ 13,021 | |||||
Total unrecognized compensation cost related to nonvested stock-based compensation | $ | $ 23,100 | $ 23,100 | $ 23,100 | |||||
Period for recognition | 1 year 6 months | |||||||
Award expiration period from grant date | 10 years | |||||||
Total fair value of stock option vested | $ | 300 | |||||||
Total intrinsic value of stock options exercised | $ | $ 2,000 | |||||||
Percentage adjustment | 25.00% | 25.00% | 25.00% | |||||
Weighted average fair value at date of grant (in USD per share) | $ / shares | $ 18.13 | $ 15.40 | $ 9.90 | |||||
Shares paid for tax withholding for share based compensation (in shares) | 39,700 | |||||||
Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Payout percentage | 0.00% | |||||||
Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Payout percentage | 200.00% | |||||||
Stock-based compensation expense | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ | $ 7,300 | $ 10,900 | $ 9,200 | |||||
Performance-based | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation vesting period | 3 years | |||||||
Award expiration period from grant date | 3 years | |||||||
Nonvested shares (in shares) | 82,542 | 504,297 | 504,297 | 504,297 | ||||
Granted (in shares) | 422,359 | 422,359 | ||||||
Baseline profitability goal period | 3 years | |||||||
Performance period, years | 3 years | |||||||
Grant date fair value of each restricted units granted (in USD per share) | $ / shares | $ 32.27 | |||||||
Total market value of awards outstanding | $ | $ 21,400 | $ 21,400 | $ 21,400 | |||||
Nonperformance-based | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested shares (in shares) | 240,111 | 626,876 | 626,876 | 626,876 | ||||
Granted (in shares) | 378,645 | |||||||
Grant date fair value of each restricted units granted (in USD per share) | $ / shares | $ 32.52 | |||||||
Total market value of awards outstanding | $ | $ 26,600 | $ 26,600 | $ 26,600 | |||||
Nonperformance-based | Non employee board of directors and employees in international jurisdiction | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares of common stock to be issued for each restricted stock unit granted (in shares) | 1 | 1 | 1 | |||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested shares (in shares) | 273,531 | 194,151 | 194,151 | 194,151 | ||||
Share earned in period (in shares) | 85,082 | |||||||
Market value of shares vested | $ | $ 2,600 | |||||||
Fair value of restricted stock | $ | $ 8,200 | $ 8,200 | $ 8,200 | |||||
Restricted Stock | Management | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation vesting period | 5 years | |||||||
Time Based Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 348,906 | |||||||
Restricted Stock Units (RSUs) | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 196,325 | |||||||
Restricted Stock Units (RSUs) | Non employee board of directors and employees in international jurisdiction | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares of common stock to be issued for each restricted stock unit granted (in shares) | 1 | 1 | 1 | |||||
Restricted Stock Units (RSUs) | Director | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation vesting period | 1 year | |||||||
Conversion ratio | 1 | 1 | 1 | |||||
Granted (in shares) | 29,739 | |||||||
Former Parent | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ | $ 500 | $ 2,200 | $ 4,000 | $ 3,800 | ||||
Tranche One | Restricted Stock Units (RSUs) | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation vesting period | 2 years | |||||||
Vesting rights, percentage | 50.00% | |||||||
Tranche Two | Restricted Stock Units (RSUs) | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation vesting period | 4 years | |||||||
Vesting rights, percentage | 50.00% | |||||||
Award 2018 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Weighted average fair value at date of grant (in USD per share) | $ / shares | $ 4.61 | |||||||
Award 2018 | Performance-based | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 82,542 | |||||||
Award 2017 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Weighted average fair value at date of grant (in USD per share) | $ / shares | $ 2.67 | |||||||
Award 2017 | Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested shares (in shares) | 43,786 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Assumption Used and Resulting Weighted Average Fair Value of Stock Option Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, minimum | 25.00% | 22.00% | 23.00% |
Expected volatility, maximum | 27.00% | 29.00% | 30.00% |
Weighted average expected volatility | 26.00% | 25.00% | 24.00% |
Weighted average dividend yield | 2.50% | 2.90% | 2.80% |
Risk-free interest rate, minimum | 2.50% | 1.90% | 0.70% |
Risk-free interest rate, maximum | 2.80% | 3.20% | 2.40% |
Weighted average fair value at date of grant (in USD per share) | $ 18.13 | $ 15.40 | $ 9.90 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 3 months 18 days |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 7 years 6 months | 7 years 7 months 6 days | 7 years 8 months 12 days |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | May 23, 2019 | Dec. 28, 2019 | Dec. 28, 2019 | Dec. 28, 2019 |
Number of Shares | ||||
Outstanding, beginning balance (in shares) | 1,835,236 | |||
Exercised (in shares) | (113,548) | |||
Forfeited/cancelled (in shares) | (5,666) | |||
Outstanding, ending balance (in shares) | 1,835,236 | 1,716,022 | 1,716,022 | 1,716,022 |
Exercisable (in shares) | 1,085,556 | 1,085,556 | 1,085,556 | |
Weighted Average Exercise Price | ||||
Outstanding, beginning balance (in USD per share) | $ 25.77 | |||
Exercised (in USD per share) | 19.66 | |||
Forfeited/cancelled (in USD per share) | 29.56 | |||
Outstanding, ending balance (in USD per share) | $ 25.77 | $ 26.16 | 26.16 | $ 26.16 |
Exercisable, ending balance (in USD per share) | $ 25.71 | $ 25.71 | $ 25.71 | |
Options outstanding, remaining contractual term | 6 years 4 months 24 days | 6 years 7 months 6 days | ||
Options exercisable, remaining contractual term | 6 years | |||
Options outstanding, intrinsic value | $ 30,682 | $ 28,016 | $ 28,016 | $ 28,016 |
Options exercisable, intrinsic value | $ 18,218 | $ 18,218 | $ 18,218 |
STOCK-BASED COMPENSATION - RSU
STOCK-BASED COMPENSATION - RSU Activity (Details) - $ / shares | 3 Months Ended | 7 Months Ended | 12 Months Ended |
Sep. 28, 2019 | Dec. 28, 2019 | Dec. 28, 2019 | |
Performance-based | |||
Number Outstanding | |||
Nonvested shares, Beginning balance (in shares) | 82,542 | ||
Granted (in shares) | 422,359 | 422,359 | |
Issued as Common Stock (in shares) | 0 | ||
Forfeited/cancelled (in shares) | (604) | ||
Nonvested shares, Ending balance (in shares) | 504,297 | 504,297 | |
Vested (in shares) | 0 | 0 | |
Weighted Average Grant Date Fair Value | |||
Nonvested shares, Beginning balance (in USD per share) | $ 31 | ||
Granted (in USD per share) | 32.27 | ||
Issued as Common Stock (in USD per share) | 0 | ||
Forfeited/cancelled (in USD per share) | 31 | ||
Nonvested shares, Ending balance (in USD per share) | $ 32.06 | $ 32.06 | |
Vested (in USD per share) | $ 0 | ||
Nonperformance-based | |||
Number Outstanding | |||
Nonvested shares, Beginning balance (in shares) | 240,111 | ||
Granted (in shares) | 378,645 | ||
Dividend Equivalents (in shares) | 17,407 | ||
Issued as Common Stock (in shares) | (4,691) | ||
Forfeited/cancelled (in shares) | (4,596) | ||
Nonvested shares, Ending balance (in shares) | 626,876 | 626,876 | |
Vested (in shares) | 45,034 | 45,034 | |
Weighted Average Grant Date Fair Value | |||
Nonvested shares, Beginning balance (in USD per share) | $ 30.26 | ||
Granted (in USD per share) | 32.52 | ||
Dividend Equivalents (in USD per share) | 31.48 | ||
Issued as Common Stock (in USD per share) | 25 | ||
Forfeited/cancelled (in USD per share) | 29.04 | ||
Nonvested shares, Ending balance (in USD per share) | $ 31.71 | $ 31.71 | |
Vested (in USD per share) | $ 34.11 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Activity (Details) - Restricted Stock | 7 Months Ended |
Dec. 28, 2019$ / sharesshares | |
Number Outstanding | |
Nonvested shares, Beginning balance (in shares) | shares | 273,531 |
Dividend equivalents (in shares) | shares | 5,702 |
Vested (in shares) | shares | (85,082) |
Nonvested shares, Ending balance (in shares) | shares | 194,151 |
Weighted Average Grant Date Fair Value | |
Nonvested shares, Beginning balance (in USD per share) | $ / shares | $ 25.11 |
Dividend equivalents (in USD per share) | $ / shares | 25.15 |
Vested (in USD per share) | $ / shares | 25.02 |
Nonvested shares, Ending balance (in USD per share) | $ / shares | $ 25.15 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes, Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 61,691 | $ 159,716 | $ 169,160 |
Foreign | 73,503 | 180,362 | 189,993 |
Income before income taxes | $ 135,194 | $ 340,078 | $ 359,153 |
INCOME TAXES - Provision for _2
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Current: | |||
Federal | $ 14,831 | $ 29,670 | $ 161,482 |
Foreign | 23,017 | 32,501 | 31,444 |
State | 4,866 | 12,303 | 13,546 |
Total current income taxes | 42,714 | 74,474 | 206,472 |
Deferred: | |||
Federal and state | (5,912) | 4,067 | 36,009 |
Foreign | 1,738 | (1,536) | 481 |
Total deferred income taxes | (4,174) | 2,531 | 36,490 |
Total provision for income taxes | $ 38,540 | $ 77,005 | $ 242,962 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Tax reform expense (benefit) | $ 136,700 | ||
Transition tax For accumulated foreign earnings | 110,600 | ||
Deferred tax asset, provisional income tax benefit | 19,400 | ||
Deferred tax liability, foreign income and dividends | 6,700 | ||
Measurement period adjustment, income tax expense (benefit) | $ 5,500 | ||
Measurement period adjustment, transition tax for accumulated foreign earnings, provisional income tax expense | 5,700 | ||
Measurement period adjustment, change in tax rate, deferred tax liability, provisional income tax benefit | 1,500 | ||
Measurement period adjustment, change in tax rate, deferred tax liability, other charges | 1,300 | ||
Tax settlement | 600 | 5,800 | $ 4,700 |
Undistributed earnings of foreign subsidiaries | 19,700 | ||
Change in indefinite reinvestment | 1,100 | ||
Retained earnings | 1,718 | 0 | |
Income taxes paid, net of refunds | 28,886 | 180 | $ 1,723 |
Potential tax benefits for federal capital loss carryforwards, foreign operations | 2,200 | ||
State operating loss carry forwards | 7,600 | ||
Deferred Tax Assets, Valuation Allowance | 16,699 | 24,175 | |
Net increase in valuation allowance related to state operating loss and carryforwards | 600 | ||
Valuation allowance, foreign deferred tax asset | 6,000 | ||
Net increase in valuation allowance related to foreign carryforwards and other deferred tax asset | 10,400 | ||
Valuation allowance, former parent investment | 24,500 | ||
Net unrecognized tax benefits including interest and penalties if recognized, would reduce the annual effective tax rate | 14,266 | $ 51,296 | |
Decrease in unrecognized tax benefits is reasonably possible | 900 | ||
Unrecognized tax benefits that reduce income tax expense | 700 | ||
Other Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards valuation allowance | 6,700 | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards valuation allowance | 1,800 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards valuation allowance | 7,600 | ||
Deferred Tax Assets, Valuation Allowance | $ 600 |
INCOME TAXES - Differences Betw
INCOME TAXES - Differences Between Income Taxes Computed by Applying Statutory Federal Income Tax Rate and Income Tax Expense reported In Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | $ 28,391 | $ 71,416 | $ 125,703 |
State income taxes, net of federal tax benefit | 2,476 | 10,532 | 5,788 |
Foreign rate differences | (8,983) | (5,125) | (28,077) |
Tax reform | 258 | 5,526 | 136,722 |
Stock-based compensation - federal | (3,169) | (2,692) | (2,929) |
Adjustments to opening balances | 1,928 | 0 | 0 |
Change in valuation allowance | 17,025 | (2,707) | 5,120 |
GILTI | 2,437 | 0 | 0 |
Change in indefinite reinvestment assertions | (3,914) | 0 | 0 |
Other | 2,091 | 55 | 635 |
Total provision for income taxes | $ 38,540 | $ 77,005 | $ 242,962 |
INCOME TAXES - Deferred Income
INCOME TAXES - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Deferred income tax assets: | ||
Inventories | $ 7,811 | $ 7,676 |
Deferred compensation | 13,816 | 11,701 |
Other employee benefits | 10,125 | 3,297 |
Stock-based compensation | 8,076 | 6,243 |
Other accrued expenses | 27,369 | 19,266 |
Intangible assets | 21,356 | 7,541 |
Leases | 20,219 | 0 |
Net deferred income tax assets | 9,779 | 23,702 |
Deferred income tax liabilities: | 118,551 | 79,426 |
Depreciation | (16,699) | (24,175) |
Taxes on unremitted earnings | 101,852 | 55,251 |
Other deferred tax liabilities | ||
Leases | 19,417 | 0 |
Deferred income tax liabilities | 2,959 | 4,142 |
Taxes on unremitted earnings | 2,163 | 9,702 |
Other deferred tax liabilities | 221 | 1,195 |
Deferred income tax liabilities | 24,760 | 15,039 |
Total net deferred income tax assets | 77,092 | 40,212 |
Amounts included in the balance sheets: | ||
Deferred income taxes - assets | 79,551 | 42,891 |
Deferred income taxes - liabilities | (2,459) | (2,679) |
Total net deferred income tax assets | $ 77,092 | $ 40,212 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Change in Accrual for Unrecognized Income Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | $ 59,020 | $ 53,751 | $ 50,253 |
Additions for current year tax positions | 1,260 | 2,466 | 7,419 |
Additions for prior year tax positions | 7,513 | 9,156 | 1,533 |
Reductions for prior year tax positions | (3,998) | (191) | (419) |
Reductions due to statute expirations | (801) | (6,162) | (5,035) |
Payments in settlement | (388) | ||
Amounts transferred to former parent | (44,714) | ||
Ending Balance | 17,892 | 59,020 | 53,751 |
Unrecognized Income Tax Benefits | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | 54,081 | 51,263 | 48,842 |
Additions for current year tax positions | 1,260 | 2,458 | 7,419 |
Additions for prior year tax positions | 4,881 | 6,286 | 75 |
Reductions for prior year tax positions | (3,680) | (191) | (418) |
Reductions due to statute expirations | (674) | (5,735) | (4,655) |
Payments in settlement | (205) | ||
Amounts transferred to former parent | (41,986) | ||
Ending Balance | 13,677 | 54,081 | 51,263 |
Accrued Interest and Penalties | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning Balance | 4,939 | 2,488 | 1,411 |
Additions for current year tax positions | 0 | 8 | 0 |
Additions for prior year tax positions | 2,632 | 2,870 | 1,458 |
Reductions for prior year tax positions | (318) | 0 | (1) |
Reductions due to statute expirations | (127) | (427) | (380) |
Payments in settlement | (183) | ||
Amounts transferred to former parent | (2,728) | ||
Ending Balance | $ 4,215 | $ 4,939 | $ 2,488 |
INCOME TAXES - Amounts Included
INCOME TAXES - Amounts Included in Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||||
Unrecognized income tax benefits, including interest and penalties | $ 17,892 | $ 59,020 | $ 53,751 | $ 50,253 |
Less: deferred tax benefits | (3,626) | (7,724) | ||
Total unrecognized tax benefits | $ 14,266 | $ 51,296 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) | May 22, 2019shares | Dec. 28, 2019shares |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Spinoff transaction, conversion ratio | 0.1428571429 | |
Number of shares outstanding (in shares) | 56,647,561 | |
Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Stock options excluded from computation of earnings per share (in shares) | 100,000 | |
Performance-based | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Stock options excluded from computation of earnings per share (in shares) | 300,000 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 28,753 | $ 14,502 | $ 37,986 | $ 15,413 | $ 51,902 | $ 71,018 | $ 60,458 | $ 79,696 | $ 96,654 | $ 263,073 | $ 116,191 |
Earnings per common share | |||||||||||
Basic weighted average shares outstanding (in shares) | 56,688 | 56,648 | 56,648 | ||||||||
Dilutive effect of stock-based awards (in shares) | 521 | 0 | 0 | ||||||||
Diluted weighted average shares outstanding (in shares) | 57,209 | 56,648 | 56,648 | ||||||||
Basic earnings per share (in USD per share) | $ 1.71 | $ 4.64 | $ 2.05 | ||||||||
Diluted earnings per share (in USD per share) | $ 1.69 | $ 4.64 | $ 2.05 |
COMMITMENTS - Narrative (Detail
COMMITMENTS - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 28, 2019USD ($) | |
Other Commitments [Line Items] | |
Future minimum royalty payments 2020 | $ 1 |
Future minimum royalty payments 2021 | 1 |
Future minimum royalty payments 2022 | 0.1 |
Future minimum royalty payments 2023 | 0.1 |
Future minimum royalty payments 2024 | 0.1 |
Total payments for purchase commitments 2020 | 347.7 |
Future payments under purchase commitments 2020 | 56 |
Future payments under purchase commitments 2021 | 28.1 |
Future payments under purchase commitments 2022 | 7.7 |
Future payments under purchase commitments 2023 | 6.1 |
Future payments under purchase commitments 2024 | 3.3 |
Future payments under purchase commitments thereafter | 17.5 |
Surety bonds, standby letters of credit and international bank guarantees | $ 32.6 |
Minimum | |
Other Commitments [Line Items] | |
Service period of purchase commitments | 1 month |
Maximum | |
Other Commitments [Line Items] | |
Service period of purchase commitments | 5 months |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Assets | ||
Operating lease assets | $ 86,582 | $ 0 |
Liabilities | ||
Operating lease liabilities, current | 35,389 | 0 |
Operating lease liabilities, noncurrent | 54,746 | $ 0 |
Present value of future minimum lease payments | $ 90,135 | |
Weighted-average remaining lease term (in years) | ||
Operating leases | 3 years 10 months 6 days | |
Weighted-average discount rate | ||
Operating leases | 3.15% |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 28, 2019USD ($) | |
Leases [Abstract] | |
Operating lease costs | $ 37,743 |
Short-term lease costs (excluding leases of one month or less) | 3,043 |
Variable lease costs | 5,300 |
Total lease costs | 46,086 |
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows | 46,239 |
Right-of-use assets obtained in exchange for new operating leases - non-cash activity | $ 39,874 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2018 | Dec. 28, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Rent expense | $ 40.8 | |
Lease not yet commenced | $ 0.6 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Leases (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Leases [Abstract] | ||
2020 | $ 36,711 | |
2021 | 22,261 | |
2022 | 11,979 | |
2023 | 8,938 | |
2024 | 5,222 | |
Thereafter | 6,574 | |
Total future minimum lease payments | 91,685 | |
Less: amounts related to imputed interest | (1,550) | |
Present value of future minimum lease payments | 90,135 | |
Less: operating lease liabilities, current | (35,389) | $ 0 |
Operating lease liabilities, noncurrent | $ 54,746 | $ 0 |
LEASES - Future Minimum Rental
LEASES - Future Minimum Rental Payments Under Previous Accounting Standard (Details) $ in Thousands | Dec. 28, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 33,562 |
2020 | 29,246 |
2021 | 17,810 |
2022 | 7,932 |
2023 | 4,353 |
Thereafter | 4,582 |
Total future minimum lease payments | $ 97,485 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 36,600 | $ 24,562 | $ 20,385 | $ 9,541 |
Restructuring reserve | 2,172 | 23,249 | 11,007 | |
Selling, general and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 13,800 | 9,100 | 6,500 | |
Cost of goods sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 10,800 | 11,300 | $ 3,000 | |
Accrued Current Liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve | 21,200 | |||
Other Noncurrent Liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve | $ 2,000 |
RESTRUCTURING - Components of R
RESTRUCTURING - Components of Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring and Related Activities [Abstract] | ||||
Severance and employee-related benefits | $ 14,903 | $ 20,385 | $ 9,541 | |
Asset impairments | 1,596 | 0 | 0 | |
Inventory write-downs | 4,403 | 0 | 0 | |
Other | 3,660 | 0 | 0 | |
Total restructuring charges | $ 36,600 | $ 24,562 | $ 20,385 | $ 9,541 |
RESTRUCTURING - Restructuring b
RESTRUCTURING - Restructuring by Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 36,600 | $ 24,562 | $ 20,385 | $ 9,541 |
Operating Segments | Wrangler | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 17,613 | 13,358 | 3,367 | |
Operating Segments | Lee | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 6,685 | 6,592 | 6,174 | |
Operating Segments | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 264 | $ 435 | $ 0 |
RESTRUCTURING - Schedule of Act
RESTRUCTURING - Schedule of Activity in Restructuring Accrual (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Restructuring Reserve [Roll Forward] | ||
Accrual, Period Start | $ 23,249 | $ 11,007 |
Charges | 18,563 | 20,385 |
Cash payments | (32,040) | (6,586) |
Adjustments to accruals | 1,663 | (1,540) |
Currency translation | (255) | (17) |
Adjustment at Separation | (9,008) | |
Accrual, Period End | 2,172 | 23,249 |
Severance | ||
Restructuring Reserve [Roll Forward] | ||
Accrual, Period Start | 23,249 | 11,007 |
Charges | 14,903 | 20,385 |
Cash payments | (31,201) | (6,586) |
Adjustments to accruals | 1,663 | (1,540) |
Currency translation | (58) | (17) |
Adjustment at Separation | (6,384) | |
Accrual, Period End | 2,172 | 23,249 |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Accrual, Period Start | 0 | 0 |
Charges | 3,660 | 0 |
Cash payments | (839) | 0 |
Adjustments to accruals | 0 | 0 |
Currency translation | (197) | 0 |
Adjustment at Separation | (2,624) | |
Accrual, Period End | $ 0 | $ 0 |
TRANSACTIONS WITH FORMER PARE_3
TRANSACTIONS WITH FORMER PARENT - Additional Information (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | ||
May 30, 2019 | Dec. 28, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Related Party Transactions [Abstract] | |||||
Sales to related party | $ 14,100 | $ 51,000 | $ 45,500 | ||
Related party transaction, cost of goods sold | $ 500 | 2,100 | 6,800 | ||
Related party transaction, remaining inventory purchased from related party | $ 400 | $ 400 | 800 | ||
Notes receivable from former parent | 0 | 0 | $ 517,940 | ||
Related party transaction, weighted average note receivable rate | 3.40% | ||||
Notes payable to former parent | 0 | 0 | $ 269,112 | ||
Related party transaction, weighted average note payable rate | 3.40% | ||||
Interest income from former parent, net | $ 3,800 | $ 3,762 | $ 7,738 | $ 3,372 |
TRANSACTIONS WITH FORMER PARE_4
TRANSACTIONS WITH FORMER PARENT - Due from related parties, current (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Related Party Transaction [Line Items] | ||
Due from former parent, current | $ 0 | $ 547,690 |
Sale of trade accounts receivable | ||
Related Party Transaction [Line Items] | ||
Due from former parent, current | 0 | 544,858 |
Hedging agreements with VF | ||
Related Party Transaction [Line Items] | ||
Due from former parent, current | $ 0 | $ 2,832 |
TRANSACTIONS WITH FORMER PARE_5
TRANSACTIONS WITH FORMER PARENT - Due from related parties, noncurrent (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Related Party Transaction [Line Items] | ||
Due from former parent, noncurrent | $ 0 | $ 611 |
Hedging agreements with VF | ||
Related Party Transaction [Line Items] | ||
Due from former parent, noncurrent | $ 0 | $ 611 |
TRANSACTIONS WITH FORMER PARE_6
TRANSACTIONS WITH FORMER PARENT - Due to related parties, current (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Dec. 29, 2018 |
Related Party Transaction [Line Items] | ||
Due to former parent, current | $ 0 | $ 16,140 |
Sourcing payable | ||
Related Party Transaction [Line Items] | ||
Due to former parent, current | $ 0 | $ 16,140 |
TRANSACTIONS WITH FORMER PARE_7
TRANSACTIONS WITH FORMER PARENT - Net Transfers To and From VF (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | $ (1,696,859) | $ 122,139 | $ (106,542) |
General financing activities | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | (723,155) | (32,498) | (436,910) |
Corporate allocations | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | 47,903 | 113,581 | 146,042 |
Stock-based compensation expense | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | 9,582 | 14,894 | 13,021 |
Pension (benefit) costs | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | (2,246) | 6,260 | 6,748 |
Purchases from parent | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | 3,193 | 998 | 2,357 |
Sales to parent | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | (13,988) | (50,962) | (45,483) |
Other income tax | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | 10,863 | 64,150 | 97,121 |
Transition tax related to the Tax Act | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | 3,937 | 5,716 | 110,562 |
Cash dividend to former parent | |||
Related Party Transaction [Line Items] | |||
Total net transfers to former parent | $ (1,032,948) | $ 0 | $ 0 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Net revenues | $ 652,611 | $ 638,138 | $ 609,746 | $ 648,344 | $ 726,233 | $ 704,246 | $ 663,856 | $ 669,663 | $ 2,548,839 | $ 2,763,998 | $ 2,830,106 |
Operating income | 58,547 | 31,028 | 53,520 | 25,195 | 69,616 | 95,284 | 75,734 | 92,408 | 168,290 | 333,042 | 357,418 |
Net income | $ 28,753 | $ 14,502 | $ 37,986 | $ 15,413 | $ 51,902 | $ 71,018 | $ 60,458 | $ 79,696 | $ 96,654 | $ 263,073 | 116,191 |
Earnings Per Share [Abstract] | |||||||||||
Earnings per share from continuing operations, basic (in USD per share) | $ 0.51 | $ 0.26 | $ 0.67 | $ 0.27 | $ 0.92 | $ 1.25 | $ 1.07 | $ 1.41 | $ 1.71 | $ 4.64 | |
Earnings per common share - basic, discontinued operations (in USD per share) | 0.50 | 0.25 | 0.67 | 0.27 | 0.92 | 1.25 | 1.07 | 1.41 | 1.69 | 4.64 | |
Dividends per common share (in USD per share) | $ 0.56 | $ 0.56 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1.12 | $ 0 | |
Restructuring charges | $ 36,600 | $ 24,562 | $ 20,385 | $ 9,541 | |||||||
Restructuring, after-tax | $ 33,400 | ||||||||||
Transaction and deal-related costs | $ 14,400 | $ 19,400 | $ 12,800 | $ 23,400 | $ 1,200 | $ 2,000 | $ 1,900 | ||||
Transaction and deal-related costs, net of tax | $ 11,000 | 14,900 | $ 10,100 | 18,400 | $ 100 | $ 1,700 | $ 1,500 | ||||
Non-cash impairment of intangible asset | 32,600 | ||||||||||
Goodwill and intangible asset impairment charges, after-tax | $ 25,200 | ||||||||||
INDIA | |||||||||||
Earnings Per Share [Abstract] | |||||||||||
Transaction and deal-related costs | 12,300 | ||||||||||
Transaction and deal-related costs, net of tax | $ 10,200 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Feb. 18, 2020 | |
Subsequent Event | Dividend Declared | ||
Subsequent Event [Line Items] | ||
Cash dividend (in USD per share) | $ 0.56 | |
Minimum | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Swiss tax act, foreign, Benefit | $ 5.5 | |
Maximum | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Swiss tax act, foreign, Benefit | $ 7.5 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowance, former parent investment | $ 24,500 | ||
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 10,549 | $ 9,230 | $ 5,176 |
Charged to Costs and Expenses | 5,988 | 7,025 | 4,571 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 4,685 | 5,706 | 517 |
Balance at End of Period | 11,852 | 10,549 | 9,230 |
Valuation allowance for deferred income tax assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 24,175 | 26,882 | 21,762 |
Charged to Costs and Expenses | 17,025 | 0 | 5,120 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 24,501 | 2,707 | 0 |
Balance at End of Period | $ 16,699 | $ 24,175 | $ 26,882 |