Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Jan. 28, 2024 | Mar. 13, 2024 | Jul. 28, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 28, 2024 | ||
Current Fiscal Year End Date | --01-28 | ||
Document Transition Report | false | ||
Entity File Number | 001-38936 | ||
Entity Registrant Name | CHEWY, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 90-1020167 | ||
Entity Address, Address Line One | 7700 West Sunrise Boulevard | ||
Entity Address, City or Town | Plantation | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33322 | ||
City Area Code | 786 | ||
Local Phone Number | 320-7111 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.01 per share | ||
Trading Symbol | CHWY | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.9 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to the 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The registrant's Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended January 28, 2024. | ||
Entity Central Index Key | 0001766502 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 136,052,148 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 298,863,356 |
Audit Information
Audit Information | 12 Months Ended |
Jan. 28, 2024 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Miami, Florida |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 602,232 | $ 331,641 |
Marketable securities | 531,785 | 346,944 |
Accounts receivable | 154,043 | 126,969 |
Inventories | 719,273 | 678,005 |
Prepaid expenses and other current assets | 97,015 | 41,221 |
Total current assets | 2,104,348 | 1,524,780 |
Property and equipment, net | 521,298 | 478,885 |
Operating lease right-of-use assets | 474,617 | 423,518 |
Goodwill | 39,442 | 39,442 |
Other non-current assets | 47,146 | 53,193 |
Total assets | 3,186,851 | 2,519,818 |
Current liabilities: | ||
Trade accounts payable | 1,104,940 | 1,033,184 |
Accrued expenses and other current liabilities | 1,005,937 | 794,534 |
Total current liabilities | 2,110,877 | 1,827,718 |
Operating lease liabilities | 527,795 | 471,821 |
Other long-term liabilities | 37,935 | 60,011 |
Total liabilities | 2,676,607 | 2,359,550 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value per share, 5,000,000 shares authorized, no shares issued and outstanding as of January 28, 2024 and January 29, 2023 | 0 | 0 |
Additional paid-in capital | 2,481,984 | 2,171,247 |
Accumulated deficit | (1,975,652) | (2,015,232) |
Accumulated other comprehensive loss | (406) | 0 |
Total stockholders’ equity | 510,244 | 160,268 |
Total liabilities and stockholders’ equity | 3,186,851 | 2,519,818 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 1,329 | 1,141 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 2,989 | $ 3,112 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 28, 2024 | Jan. 29, 2023 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, issued (in shares) | 132,913,046 | 114,160,531 |
Common stock, outstanding (in shares) | 132,913,046 | 114,160,531 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 395,000,000 | 395,000,000 |
Common stock, issued (in shares) | 311,188,356 | |
Common stock, outstanding (in shares) | 298,863,356 | 311,188,356 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Income Statement [Abstract] | |||
Net sales | $ 11,147,720 | $ 10,119,000 | $ 8,967,407 |
Cost of goods sold | 7,986,202 | 7,284,505 | 6,581,936 |
Gross profit | 3,161,518 | 2,834,495 | 2,385,471 |
Operating expenses: | |||
Selling, general and administrative | 2,442,683 | 2,128,688 | 1,840,135 |
Advertising and marketing | 742,460 | 649,386 | 618,902 |
Total operating expenses | 3,185,143 | 2,778,074 | 2,459,037 |
(Loss) income from operations | (23,625) | 56,421 | (73,566) |
Interest income (expense), net | 58,501 | 9,290 | (1,641) |
Other income (expense), net | 13,354 | (13,166) | 0 |
Income (loss) before income tax provision | 48,230 | 52,545 | (75,207) |
Income tax provision | 8,650 | 2,646 | 0 |
Net income (loss) | 39,580 | 49,899 | (75,207) |
Other comprehensive income (loss) | |||
Net income (loss) | 39,580 | 49,899 | (75,207) |
Foreign currency translation adjustments | (406) | 0 | 0 |
Comprehensive income (loss) | $ 39,174 | $ 49,899 | $ (75,207) |
Earnings (loss) per share attributable to common Class A and Class B stockholders: | |||
Basic (in dollars per share) | $ 0.09 | $ 0.12 | $ (0.18) |
Diluted (in dollars per share) | $ 0.09 | $ 0.12 | $ (0.18) |
Weighted-average common shares used in computing earnings (loss) per share: | |||
Basic (in shares) | 429,457 | 422,331 | 417,218 |
Diluted (in shares) | 432,040 | 427,770 | 417,218 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Total | Class A and Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at beginning of period (in shares) at Jan. 31, 2021 | 415,046 | ||||
Balance at beginning of period at Jan. 31, 2021 | $ (54,970) | $ 4,150 | $ 1,930,804 | $ (1,989,924) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 77,772 | 77,772 | |||
Vesting of share-based compensation awards (in shares) | 4,873 | ||||
Vesting of share-based compensation awards | 0 | $ 49 | (49) | ||
Distribution to parent (in shares) | 187 | ||||
Distribution to parent | 0 | $ 2 | (2) | ||
Tax sharing agreement with related parties | 12,785 | 12,785 | |||
Net income (loss) | (75,207) | (75,207) | |||
Balance at end of period (in shares) at Jan. 30, 2022 | 420,106 | ||||
Balance at end of period at Jan. 30, 2022 | (39,620) | $ 4,201 | 2,021,310 | (2,065,131) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 158,122 | 158,122 | |||
Vesting of share-based compensation awards (in shares) | 5,109 | ||||
Vesting of share-based compensation awards | 0 | $ 51 | (51) | ||
Tax withholdings for share-based compensation awards (in shares) | (53) | ||||
Tax withholdings for share-based compensation awards | (2,475) | $ (1) | (2,474) | ||
Distribution to parent (in shares) | 187 | ||||
Distribution to parent | 0 | $ 2 | (2) | ||
Tax sharing agreement with related parties | (5,658) | (5,658) | |||
Net income (loss) | 49,899 | 49,899 | |||
Balance at end of period (in shares) at Jan. 29, 2023 | 425,349 | ||||
Balance at end of period at Jan. 29, 2023 | 160,268 | $ 4,253 | 2,171,247 | (2,015,232) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 239,106 | 239,106 | |||
Vesting of share-based compensation awards (in shares) | 6,334 | ||||
Vesting of share-based compensation awards | 0 | $ 64 | (64) | ||
Tax withholdings for share-based compensation awards (in shares) | 0 | ||||
Tax withholdings for share-based compensation awards | (5) | $ 0 | (5) | ||
Distribution to parent (in shares) | 93 | ||||
Distribution to parent | 0 | $ 1 | (1) | ||
Tax sharing agreement with related parties | (4,999) | (4,999) | |||
Noncash settlement with related parties | 54,734 | 54,734 | |||
Capital contribution from parent reorganization transaction | 21,966 | 21,966 | |||
Net income (loss) | 39,580 | 39,580 | |||
Other comprehensive loss | (406) | (406) | |||
Balance at end of period (in shares) at Jan. 28, 2024 | 431,776 | ||||
Balance at end of period at Jan. 28, 2024 | $ 510,244 | $ 4,318 | $ 2,481,984 | $ (1,975,652) | $ (406) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Cash flows from operating activities | |||
Net income (loss) | $ 39,580 | $ 49,899 | $ (75,207) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 109,693 | 83,440 | 55,319 |
Share-based compensation expense | 239,107 | 158,122 | 77,772 |
Non-cash lease expense | 37,818 | 39,389 | 32,996 |
Change in fair value of equity warrants and investments | (13,069) | 13,340 | 0 |
Unrealized foreign currency gains, net | (391) | 0 | 0 |
Other | 3,914 | 1,072 | 595 |
Net change in operating assets and liabilities: | |||
Accounts receivable | (27,072) | (2,573) | (20,858) |
Inventories | (41,259) | (115,261) | (41,745) |
Prepaid expenses and other current assets | (50,099) | (10,964) | (7,357) |
Other non-current assets | (29,942) | 1,114 | (4,960) |
Trade accounts payable | 71,762 | 147,465 | 84,058 |
Accrued expenses and other current liabilities | 152,329 | 7,932 | 128,706 |
Operating lease liabilities | (27,179) | (21,632) | (19,864) |
Other long-term liabilities | 21,019 | (1,566) | (17,712) |
Net cash provided by operating activities | 486,211 | 349,777 | 191,743 |
Cash flows from investing activities | |||
Capital expenditures | (143,282) | (230,310) | (183,186) |
Cash paid for acquisition of business, net of cash acquired | (367) | (40,033) | 0 |
Purchases of marketable securities | (3,221,714) | (543,761) | 0 |
Proceeds from maturities of marketable securities | 3,078,000 | 200,000 | 0 |
Acquisition of assets | 0 | 0 | (10,086) |
Other | 0 | (1,400) | 0 |
Net cash used in investing activities | (287,363) | (615,504) | (193,272) |
Cash flows from financing activities | |||
Proceeds from parent reorganization transaction, net of cash paid for income taxes | 60,601 | 0 | 0 |
Capital contribution from parent reorganization transaction | 21,966 | 0 | 0 |
(Payments for) proceeds from tax sharing agreement with related parties | (10,279) | (2,828) | 43,714 |
Principal repayments of finance lease obligations | (510) | (681) | (869) |
Payment of debt modification costs | (175) | (750) | (1,584) |
Payments for tax withholdings related to vesting of share-based compensation awards | (5) | (2,475) | 0 |
Net cash provided by (used in) financing activities | 71,598 | (6,734) | 41,261 |
Effect of exchange rate changes on cash and cash equivalents | 145 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 270,591 | (272,461) | 39,732 |
Cash and cash equivalents, as of beginning of period | 331,641 | 604,102 | 564,370 |
Cash and cash equivalents, as of end of period | 602,232 | 331,641 | 604,102 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 2,872 | 2,058 | 2,053 |
Cash paid for income taxes | $ 1,799,758 | $ 0 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Jan. 28, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Chewy, Inc. and its wholly-owned subsidiaries (collectively “Chewy” or the “Company”) is a pure play e-commerce business geared toward pet products and services for dogs, cats, fish, birds, small pets, horses, and reptiles. Chewy serves its customers through its retail websites, and its mobile applications and focuses on delivering exceptional customer service, competitive prices, outstanding convenience (including Chewy’s Autoship subscription program, fast shipping, and hassle-free returns), and a large selection of high-quality pet food, treats and supplies, and pet healthcare products. The Company is controlled by a consortium including private investment funds advised by BC Partners Advisors LP (“BC Partners”) and its affiliates, La Caisse de dépôt et placement du Québec, affiliates of GIC Special Investments Pte Ltd, affiliates of StepStone Group LP and funds advised by Longview Asset Management, LLC (collectively, the “Sponsors”). The Company was controlled by PetSmart LLC (“PetSmart”), a wholly-owned subsidiary of the Sponsors, through February 11, 2021. On October 30, 2023 (the “Closing Date”), the Company entered into certain transactions (the “Transactions”) with affiliates of BC Partners pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). The Transactions resulted in such affiliates restructuring their ownership interests in the Company and Chewy Pharmacy KY, LLC (“Chewy Pharmacy KY”) becoming an indirect wholly-owned subsidiary of the Company. Contemporaneously with the execution and delivery of the Merger Agreement, the Company and the BC Partners-affiliated stockholders named therein (the “BCP Stockholder Parties”) entered into an Amended and Restated Investor Rights Agreement (the “A&R Investor Rights Agreement”), which amended and restated in its entirety that certain Investor Rights Agreement, dated as of June 13, 2019, by and among the Company and the stockholders identified therein. The A&R Investor Rights Agreement contains changes to the governing arrangements between the BCP Stockholder Parties and the Company, including (i) the gradual elimination of the Company’s dual class share structure through the conversion of the Company’s Class B common stock (ten votes per share) into Class A common stock (one vote per share), (ii) certain revisions to the BCP Stockholder Parties director nomination rights which will accelerate the step down of their nomination rights as the economic ownership of the BCP Stockholder Parties decreases following the date that such stockholders no longer hold an aggregate of over 50% of the outstanding Class A and Class B common stock of the Company, (iii) the approval of a disinterested and independent committee of the Company’s board of directors for certain change of control transactions, (iv) certain standstill commitments, and (v) additional transfer restrictions. On the Closing Date, affiliates of BC Partners transferred $1.9 billion to the Company to be used to fund: (i) tax obligations of its affiliates that were inherited by the Company as a result of the Transactions and (ii) expenses incurred by the Company in connection with the Transactions. The Merger Agreement requires affiliates of BC Partners to indemnify the Company for certain tax liabilities and includes customary indemnifications related to the Transactions. For additional information, see Note 12 – Income Taxes. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Jan. 28, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The Company’s accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) accounting standards codification (“ASC”). In connection with the Transactions described in Note 1 – Description of Business, the Company has provided restated consolidated financial statements and related notes for the historical comparative periods in this 10-K Report reflecting the operations of Chewy Pharmacy KY as part of the Company’s consolidated financial statements. This restatement was accounted for as a common control transaction, with Chewy Pharmacy KY’s net assets transferred at the previous parent company’s historical basis. Fiscal Year The Company has a 52- or 53-week fiscal year ending each year on the Sunday that is closest to January 31 of that year. The Company’s 2023 fiscal year ended January 28, 2024 and included 52 weeks (“Fiscal Year 2023”). The Company’s 2022 fiscal year ended January 29, 2023 and included 52 weeks (“Fiscal Year 2022”). The Company’s 2021 fiscal year ended January 30, 2022 and included 52 weeks (“Fiscal Year 2021”). Principles of Consolidation The consolidated financial statements and related notes include the accounts of Chewy, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates GAAP requires management to make certain estimates, judgments, and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates and judgments. Actual results could differ from those estimates. Key estimates relate primarily to determining the net realizable value and demand for inventory, useful lives associated with property and equipment and intangible assets, valuation allowances with respect to deferred tax assets, contingencies, self-insurance accruals, evaluation of sales tax positions, and the valuation and assumptions underlying share-based compensation and equity warrants. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents primarily consist of institutional money market funds, U.S. Treasury securities, certificates of deposit, and commercial paper and are carried at cost, which approximates fair value. Concentration of Credit Risk The Company maintains the majority of its cash and cash equivalents in accounts with large financial institutions. At times, balances in these accounts may exceed federally insured limits; however, to date, the Company has not incurred any losses on its deposits of cash and cash equivalents. Investments The Company generally invests its excess cash in AAA-rated money market funds and investment grade short- to intermediate-term fixed income securities, including U.S. Treasury securities, certificates of deposit, and commercial paper. Such investments are included in cash and cash equivalents or marketable securities on the accompanying consolidated balance sheets and are classified based on original maturity. The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents and considers all highly liquid investments with an original maturity greater than 90 days and less than one year to be marketable securities. Marketable fixed income securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss). Each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected credit losses, as well as its ability and intent to hold the investment until a forecasted recovery of the carrying value occurs. Expected credit losses are recorded as an allowance through other income (expense), net on the Company’s consolidated statements of operations. Equity investments in public companies that have readily determinable fair values are included in marketable securities on the Company’s consolidated balance sheets and measured at fair value with changes recognized in other income (expense), net on the Company’s consolidated statements of operations. The Company holds equity warrants giving it the right to acquire stock of other companies. These warrants are classified as derivative assets and are recorded within other non-current assets on the Company’s consolidated balance sheets with gains and losses recognized in other income (expense), net on the Company’s consolidated statements of operations. These warrants are subject to vesting requirements and the fair value established at contract inception is recognized as a deferred credit reported within other long-term liabilities on the Company’s consolidated balance sheets and is amortized as the vesting requirements are achieved. For more information, see Note 4 - Financial Instruments. Accounts Receivable The Company’s accounts receivable are comprised of customer and vendor receivables. The Company’s net customer receivables were $110.0 million and $105.2 million as of January 28, 2024 and January 29, 2023, respectively, and consist of credit and debit card receivables from banks, which typically settle within five business days. The Company’s vendor receivables were $44.0 million and $21.8 million as of January 28, 2024 and January 29, 2023, respectively. The Company does not maintain an allowance for doubtful accounts as neither historical losses on customer and vendor receivables nor future projected losses on such receivables have been or are expected to be significant. Inventories The Company’s inventories represent finished goods, consist of products available for sale and are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. Inventory costs consist of product and inbound shipping and handling costs. Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers or returns to product vendors. Inventory valuation losses are recorded as cost of goods sold and historical losses have not been significant. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated over the estimated useful lives of the related assets using the straight-line method. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term (including renewals that are reasonably assured) or the estimated useful lives of the improvements. For software application projects which develop new software or enhance existing licensed or internally-developed software, external costs and certain internal costs, including payroll and payroll-related costs of employees, directly associated with developing these software applications for internal use are capitalized subsequent to the preliminary stage of development. Internal-use software costs are amortized using the straight-line method over the estimated useful life of the software when the project is substantially complete and ready for its intended use. The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gains or losses are included in the Company’s results of operations for the respective period. For more information, see Note 5 - Property and Equipment, net. Leases The Company has operating and finance lease agreements for its fulfillment and customer service centers, corporate offices, and certain equipment. The Company determines if an arrangement contains a lease at inception based on the ability to control a physically distinct asset. Operating and finance lease right-of-use assets are recorded in the consolidated balance sheets based on the initial measurement of the lease liability as adjusted to include prepaid rent and initial direct costs less any lease incentives received. Lease liabilities are measured at the commencement date based on the present value of the lease payments over the lease term. Lease payments are generally fixed but may include provisions for future rent increases based on a market index. The Company separately accounts for lease and non-lease components within lease agreements; the non-lease components primarily relate to common area maintenance for real estate leases. The Company uses its incremental borrowing rate to present value the lease liability as key inputs to determine the interest rate implicit in the lease are not shared by lessors. Operating lease expense is recorded on a straight-line basis over the lease term. Right-of-use assets and lease liabilities for short-term leases are not recognized in the consolidated balance sheets. Payments for short-term leases are recognized in the consolidated statements of operations on a straight-line basis over the lease term. Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized. The Company evaluates goodwill for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has the option to first perform a qualitative assessment of its goodwill to determine whether it is necessary to perform a quantitative impairment test. If the Company concludes via the qualitative assessment that it is more likely than not that goodwill is impaired, management performs the quantitative impairment test to evaluate the recoverability of goodwill by comparing the carrying value of the Company’s reporting units to their fair values. An impairment charge is recorded for the amount by which the carrying amounts exceed the fair values of the reporting units, with the loss recognized not exceeding the total amount of goodwill. The Company did not record any goodwill impairment during the periods presented. Intangible Assets Intangible assets are recognized and recorded at their acquisition date fair values. Intangible assets are amortized on a straight-line basis over their estimated useful lives with amortization expense included within selling, general and administrative expenses in the consolidated statements of operations. The Company determined the useful lives of its intangible assets based on multiple factors including obsolescence and the period over which expected cash flows are used to measure the fair value of the intangible asset at acquisition. The Company periodically reassesses the useful lives of its intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate. Intangible assets, net of accumulated amortization, are included within other non-current assets on the consolidated balance sheets. The estimated useful lives of intangible assets are as follows: Developed technology 3 years Impairment of Long-Lived Assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For asset groups held and used, the carrying value of the asset group is considered recoverable when the estimated undiscounted future cash flows expected to be generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment charge would be recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. Impairment charges are recognized within selling, general and administrative expenses in the consolidated statements of operations. Impairment charges recorded by the Company were not material for Fiscal Year 2023, Fiscal Year 2022, and Fiscal Year 2021. Accrued Expenses and Other Current Liabilities The following table presents the components of accrued expenses and other current liabilities (in thousands): As of January 28, 2024 January 29, 2023 Outbound fulfillment $ 491,251 $ 370,095 Advertising and marketing 106,339 99,593 Payroll liabilities 83,880 66,799 Accrued expenses and other 324,467 258,047 Total accrued expenses and other current liabilities $ 1,005,937 $ 794,534 Self-Insurance Accruals The Company uses a combination of self-insurance programs and large-deductible purchased insurance to provide for the costs of medical and workers’ compensation claims. The Company periodically evaluates its level of insurance coverage and adjusts its insurance levels based on risk tolerance and premium expense. Liabilities for the risks the Company retains, including estimates of claims incurred but not reported, are not discounted and are estimated, in part, by considering historical cost experience, demographic and severity factors, and judgments about current and expected levels of cost per claim and retention levels. Additionally, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. The Company believes the actuarial methods are appropriate for measuring these self-insurance accruals. However, based on the number of claims and the length of time from incurrence of the claims to ultimate settlement, the use of any estimation method is sensitive to the assumptions and factors described above. Accordingly, changes in these assumptions and factors can affect the estimated liability and those amounts may be different than the actual costs paid to settle the claims. Defined Contribution Plans The Company maintains a 401(k) defined contribution plan which covers all employees who meet minimum requirements and elect to participate. The Company is currently matching employee contributions, up to specified percentages of those contributions. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1-Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2-Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3-Valuations based on unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable, and accrued expenses and other current liabilities approximate fair value based on the short-term maturities of these instruments. Loss Contingencies Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities and such assessments inherently involve an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is estimable, the liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed. Unasserted claims that are not considered probable of being asserted and those for which an unfavorable outcome is not reasonably possible have not been disclosed. Revenue Recognition Chewy recognizes revenues from product sales when the customer orders an item through Chewy’s websites or mobile applications via the electronic shopping cart, funds are collected from the customer and the item is shipped from one of the Company’s fulfillment centers and delivered to the carrier. Certain products are shipped directly from manufacturers to Chewy customers. For all of the preceding, the Company is considered to be a principal to these transactions and revenue is recognized on a gross basis as the Company is (i) the primary entity responsible for fulfilling the promise to provide the specified products in the arrangement with the customer and provides the primary customer service for all products sold on Chewy’s websites or mobile applications, (ii) has inventory risk before the products have been transferred to a customer and maintains inventory risk upon accepting returns , and (iii) has discretion in establishing the price for the specified products sold on Chewy’s websites or mobile applications. Chewy primarily generates net sales from sales of pet food, pet products, pet medications and other pet health products, and related shipping fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. To encourage customers to purchase its products, the Company periodically provides incentive offers. Generally, these promotions include current discount offers, such as percentage discounts off current purchases and other similar offers. These offers, when accepted by customers, are treated as a reduction to the transaction price. Revenue typically consists of the consideration received from the customer when the order is executed less a refund allowance, which is estimated using historical experience. Taxes collected from customers for remittance to governmental authorities are excluded from net sales. Cost of Goods Sold Cost of goods sold includes the purchase price of inventory sold, freight costs associated with inventory, shipping supply costs, inventory shrinkage costs and valuation adjustments and reductions for promotions and discounts offered by the Company’s vendors. Vendor Rebates The Company has agreements with vendors to receive either percentage or volume rebates. Additionally, certain vendors provide funding for discounts relating to the Autoship subscription program which are passed on to the Company’s customers. The Company primarily receives agreed upon percentage rebates from vendors, however, certain of its vendor rebates are dependent upon reaching minimum purchase thresholds. In these instances, the Company evaluates the likelihood of reaching purchase thresholds using past experience and current year forecasts. When volume rebates can be reasonably estimated and it is probable that minimum purchase thresholds will be met, the Company records a portion of the rebate as it makes progress towards the purchase threshold. The Company also receives vendor funding in the form of advertising agreements related to general marketing activities. Amounts received from vendors are considered a reduction of the carrying value of the Company’s inventory and, therefore, such amounts are ultimately recorded as a reduction of cost of goods sold in the consolidated statements of operations. Vendor Concentration Risk The Company purchases inventory from several hundred vendors worldwide. Sales of products from the Company’s three largest vendors represented approximately 39%, 38%, and 35% of the Company’s net sales for Fiscal Year 2023, Fiscal Year 2022, and Fiscal Year 2021, respectively. Selling, General and Administrative Selling, general and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions, including accounting, finance, tax, legal, and human resources; costs associated with use by these functions of facilities and equipment, such as depreciation expense and rent; share-based compensation expense, professional fees and other general corporate costs. Fulfillment Fulfillment costs represent those costs incurred in operating and staffing fulfillment and customer service centers, including costs attributable to buying, receiving, inspecting and warehousing inventories, picking, packaging and preparing customer orders for shipment, payment processing, and responding to inquiries from customers. For Fiscal Year 2023, Fiscal Year 2022, and Fiscal Year 2021 the Company recorded fulfillment costs of $1.3 billion, $1.2 billion, and $1.2 billion, respectively, which are included within selling, general and administrative expenses in the consolidated statements of operations. Included within fulfillment costs are merchant processing fees charged by third parties that provide merchant processing services for credit cards. For Fiscal Year 2023, Fiscal Year 2022, and Fiscal Year 2021, the Company recorded merchant processing fees of $234.0 million, $207.7 million, and $183.8 million, respectively, which are included within selling, general and administrative expenses in the consolidated statements of operations. Share-Based Compensation The Company recognizes share-based compensation expense based on the equity award’s grant date fair value. For grants of restricted stock units subject to service-based and company performance-based vesting conditions, the fair value is established based on the market price on the date of the grant. For grants of restricted stock units subject to market-based vesting conditions, the fair value is established using the Monte Carlo simulation lattice model. The determination of the fair value of share-based awards is affected by the Company’s stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. The Company accounts for forfeitures as they occur. The grant date fair value of each restricted stock unit is amortized over the requisite service period. Advertising and Marketing Advertising and marketing expenses primarily consist of advertising and payroll and related expenses for personnel engaged in marketing, business development and selling activities. Advertising and marketing costs are expensed in the period that the advertising first takes place. Interest Income (Expense), net The Company generates interest income from its cash and cash equivalents and marketable securities and incurs interest expense from its borrowing facilities and finance leases. The following table provides additional information about the Company’s interest income (expense), net (in thousands): Fiscal Year 2023 2022 2021 Interest income $ 62,083 $ 11,865 $ 523 Interest expense (3,582) (2,575) (2,164) Interest income (expense), net $ 58,501 $ 9,290 $ (1,641) Other Income (Expense), net The Company’s other income (expense), net consists of changes in the fair value of equity warrants and investments, foreign currency transaction gains and losses, and allowances for credit losses. The following table provides additional information about the Company’s other income (expense), net (in thousands): Fiscal Year 2023 2022 2021 Change in fair value of equity warrants $ 13,079 $ (13,340) $ — Foreign currency transaction gains 285 174 — Change in fair value of equity investments (10) — — Other income (expense), net $ 13,354 $ (13,166) $ — Income and Other Taxes Income taxes are accounted for under the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The Company’s calculation relies on several factors, including pre-tax earnings and losses, differences between tax laws and accounting rules, statutory tax rates, uncertain tax positions, and valuation allowances. Valuation allowances are established when, in the Company’s judgment, it is more likely than not that its deferred tax assets will not be realized based on all available evidence. Management considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. Chewy determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. The Company records interest and penalties related to uncertain tax positions within interest expense and selling, general and administrative expenses, respectively, in the consolidated statements of operations. The Company collects and remits sales tax in jurisdictions in which it has a physical presence or it believes nexus exists. The Company maintains liabilities for potential exposure in states where taxability is uncertain and the Company did not collect sales tax. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. In September 2022, the FASB issued this Accounting Standards Update (“ASU”) which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period. This update became effective at the beginning of the Company’s 2023 fiscal year. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . In December 2023, the FASB issued this ASU to update income tax disclosure requirements, primarily related to the income tax rate reconciliation and income taxes paid information. This update is effective beginning with the Company’s 2025 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Jan. 28, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Petabyte Acquisition On October 23, 2022, the Company entered into a definitive Agreement and Plan of Merger (the “Petabyte Merger Agreement”) with Petabyte Technology Inc. (“Petabyte”), a Delaware corporation. Under the terms of the Petabyte Merger Agreement, the Company and Petabyte effected a merger on November 7, 2022, and Petabyte became a wholly-owned subsidiary of the Company. Headquartered in Bellevue, Washington, Petabyte is a provider of cloud-based technology solutions to the veterinary sector and the acquisition is expected to further strengthen the Company’s pet healthcare product and service offering. The following table reconciles the purchase price to the cash paid for the acquisition, net of cash acquired (in thousands): Purchase price $ 43,281 Less: cash acquired 2,881 Cash paid for acquisition of business, net of cash acquired $ 40,400 The Petabyte transaction was accounted for as a business combination in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their fair values, with the remaining unallocated purchase price recorded as goodwill. Goodwill represents the expected synergies and cost rationalization from the merger of operations as well as intangible assets that do not qualify for separate recognition such as an assembled workforce. The following table summarizes the assets acquired and liabilities assumed as of the acquisition date (in thousands): Assets acquired: Cash and cash equivalents $ 2,881 Accounts receivable 104 Goodwill 39,442 Identified intangible assets 1,510 Other current and non-current assets 318 Liabilities assumed: Other current and long-term liabilities (974) Purchase price $ 43,281 Pro forma information for the Petabyte acquisition has not been provided as the impact was not material to the Company’s consolidated results of operations. In connection with this acquisition the Company recorded goodwill of $39.4 million, none of which is anticipated to be deductible for tax purposes. The identified intangible assets consisted of $1.5 million of developed technology with an amortization period of 3.0 years. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Jan. 28, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | Financial Instruments Cash equivalents are carried at cost, which approximates fair value and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Marketable securities are carried at fair value and are classified within Level 1 because they are valued using quoted market prices. Specific to marketable fixed income securities, the Company did not record any gross unrealized gains and losses as fair value approximates amortized cost. The Company did not record any credit losses during Fiscal Year 2023. Further, as of January 28, 2024, the Company did not record an allowance for credit losses related to its fixed income securities. Equity investments in public companies that have readily determinable fair values are carried at fair value and are classified within Level 1 because they are valued using quoted market prices. Equity warrants are classified within Level 3 because they are valued based on observable and unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. The Company utilized certain valuation techniques such as the Black-Scholes option-pricing model and the Monte Carlo simulation model to determine the fair value of equity warrants. The application of these models requires the use of a number of complex assumptions based on unobservable inputs, including the expected term, expected equity volatility, discounts for lack of marketability, cash flow projections, and probability with respect to vesting requirements. The following table includes a summary of financial instruments measured at fair value as of January 28, 2024 (in thousands): Level 1 Level 2 Level 3 Cash $ 602,232 $ — $ — Money market funds — — — Cash and cash equivalents 602,232 — — U.S. Treasury securities 531,592 — — Equity investments 193 — — Marketable securities 531,785 — — Equity warrants — — 2,219 Total financial instruments $ 1,134,017 $ — $ 2,219 The following table includes a summary of financial instruments measured at fair value as of January 29, 2023 (in thousands): Level 1 Level 2 Level 3 Cash $ 301,641 $ — $ — Money market funds 30,000 — — Cash and cash equivalents 331,641 — — U.S. Treasury securities 346,926 — — Equity investments 18 — — Marketable securities 346,944 — — Equity warrants — — 31,622 Total financial instruments $ 678,585 $ — $ 31,622 The following table summarizes the change in fair value for financial instruments using unobservable Level 3 inputs (in thousands): Fiscal Year 2023 2022 Beginning balance $ 31,622 $ — Equity warrants acquired — 44,962 Change in fair value of equity warrants (29,403) (13,340) Ending balance $ 2,219 $ 31,622 As of January 28, 2024 and January 29, 2023, the deferred credit subject to vesting requirements recognized within other long-term liabilities in exchange for the equity warrants was $1.9 million and $45.0 million, respectively. The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the equity warrants as of January 28, 2024: Range Fair Value Valuation Techniques Unobservable Input Min Max Weighted Average Equity warrants $2,219 Black-Scholes and Monte Carlo Probability of vesting 0% 50% 18% Equity volatility 35% 85% 77% |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Jan. 28, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net The following is a summary of property and equipment, net (in thousands): As of January 28, 2024 January 29, 2023 Furniture, fixtures and equipment $ 174,092 $ 162,618 Computer equipment 75,677 67,849 Internal-use software 183,380 139,082 Leasehold improvements 312,123 246,386 Construction in progress 82,014 93,535 827,286 709,470 Less: accumulated depreciation and amortization 305,988 230,585 Property and equipment, net $ 521,298 $ 478,885 Internal-use software includes labor and license costs associated with software development for internal use. As of January 28, 2024 and January 29, 2023, the Company had accumulated amortization related to internal-use software of $87.5 million and $57.4 million, respectively. Construction in progress is stated at cost, which includes the cost of construction and other directly attributable costs. No provision for depreciation is made on construction in progress until the relevant assets are completed and put into use. |
Identified Intangible Assets
Identified Intangible Assets | 12 Months Ended |
Jan. 28, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Identified Intangible Assets | Identified Intangible Assets The following table provides information about the Company’s identified intangible assets (in thousands, except for weighted-average remaining life): As of January 28, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted-Average Remaining Life (years) Developed technology $ 11,596 $ (7,633) $ 3,963 1.0 Total intangible assets $ 11,596 $ (7,633) $ 3,963 1.0 For Fiscal Year 2023, Fiscal Year 2022, and Fiscal Year 2021, the Company recorded amortization expense related to intangible assets of $3.9 million, $3.5 million, and $0.3 million, respectively. The future estimated amortization of intangible assets is as follows (in thousands): Amortization Expense 2024 $ 3,585 2025 378 Total intangible asset amortization $ 3,963 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 28, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters Various legal claims arise from time to time in the normal course of business. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. The Company does not believe that the ultimate resolution of any matters to which it is presently a party will have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. International Business Machines Corporation (“IBM”) previously alleged that the Company is infringing four of its patents. On February 15, 2021, the Company filed a declaratory judgment action in the United States District Court for the Southern District of New York (the “District Court”) against IBM seeking the District Court’s declaration that the Company is not infringing the four asserted IBM patents. On April 19, 2021, IBM filed an answer with counterclaims, seeking unspecified damages, including a request that the amount of compensatory damages be trebled, injunctive relief and costs and reasonable attorneys’ fees. On May 24, 2021, IBM filed an amended complaint that included an additional assertion that the Company is infringing a fifth IBM patent. On October 8, 2021, the parties had a claim construction hearing and on November 9, 2021, the claim construction rulings resulted in one of the five patents (the “‘414 patent”) being eliminated from the case. The parties filed their motions for summary judgment which were fully briefed on February 24, 2022. On April 11, 2022, the District Court granted the Company’s motions for summary judgment that the Company did not infringe three of the patents and that the fourth patent is invalid. On April 29, 2022, IBM filed a notice of appeal in the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”) to appeal the District Court’s judgment of non-infringement of certain of the patents. Oral argument for the appeal occurred on October 4, 2023 and a decision by the Federal Circuit was issued on March 5, 2024, which upheld the District Court’s decision except for a claim related to one of the patents (the “849 patent”), which has been remanded for further proceedings. Separately, on May 3, 2023, IBM sent the Company a letter indicating that the ‘414 patent that was invalidated by the District Court was reexamined by the U.S. Patent & Trademark Office and a reexamination certificate was issued. As a result, IBM is asserting that the Company infringes the new claims of the ‘414 patent. The Company continues to deny these allegations and all other allegations of any infringement and intends to vigorously defend itself in these matters. |
Debt
Debt | 12 Months Ended |
Jan. 28, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt ABL Credit Facility The Company has a senior secured asset-based credit facility (the “ABL Credit Facility”) which matures on August 27, 2026 and provides for non-amortizing revolving loans in an aggregate principal amount of up to $800 million, subject to a borrowing base comprised of, among other things, inventory and sales receivables (subject to certain reserves). The ABL Credit Facility provides the right to request incremental commitments and add incremental asset-based revolving loan facilities in an aggregate principal amount of up to $250 million, subject to customary conditions. Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to an applicable margin, plus, at the Company’s option, either a base rate or a term Secured Overnight Financing Rate (“SOFR”). The applicable margin is generally determined based on the average excess liquidity during the immediately preceding fiscal quarter as a percentage of the maximum borrowing amount under the ABL Credit Facility, and is between 0.25% and 0.75% per annum for base rate loans and between 1.25% and 1.75% per annum for term SOFR loans. The Company is also required to pay a commitment fee of 0.25% per annum with respect to the undrawn portion of the commitments, which is generally based on average daily usage of the facility. All obligations under the ABL Credit Facility are guaranteed on a senior secured first-lien basis by the Company’s wholly-owned domestic subsidiaries, subject to certain exceptions, and secured, subject to permitted liens and other exceptions, by a perfected first-priority security interest in substantially all of the Company’s and its wholly-owned domestic subsidiaries’ assets. The ABL Credit Facility contains a number of covenants that, among other things, restrict the Company’s and its restricted subsidiaries’ ability to: • incur or guarantee additional debt and issue certain equity securities; • make certain investments and acquisitions; • make certain restricted payments and payments of certain indebtedness; • incur certain liens or permit them to exist; • enter into certain types of transactions with affiliates; • merge or consolidate with another company; and • transfer, sell or otherwise dispose of assets. Each of these restrictions is subject to various exceptions. |
Leases
Leases | 12 Months Ended |
Jan. 28, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company leases all of its fulfillment and customer service centers and corporate offices under non-cancelable operating lease agreements. The terms of the Company’s real estate leases generally range from 5 to 15 years and typically allow for the leases to be renewed for up to three additional five-year terms. Fulfillment and customer service centers and corporate office leases expire at various dates through 2038, excluding renewal options. The Company also leases certain equipment under operating and finance leases. The terms of equipment leases generally range from 3 to 5 years and do not contain renewal options. These leases expire at various dates through 2025. The Company’s finance leases as of January 28, 2024 and January 29, 2023 were not material and were included in property and equipment, net, on the Company’s consolidated balance sheets. The table below presents the operating lease-related assets and liabilities recorded on the consolidated balance sheets (in thousands): As of Leases Balance Sheet Classification January 28, 2024 January 29, 2023 Assets Operating Operating lease right-of-use assets $ 474,617 $ 423,518 Total operating lease assets $ 474,617 $ 423,518 Liabilities Current Operating Accrued expenses and other current liabilities $ 29,003 $ 27,646 Non-current Operating Operating lease liabilities 527,795 471,821 Total operating lease liabilities $ 556,798 $ 499,467 For Fiscal Year 2023 and Fiscal Year 2022, assets acquired in exchange for new operating lease liabilities were $106.3 million and $92.1 million, respectively. Lease expense primarily related to operating lease costs and were included within selling, general and administrative expenses in the consolidated statements of operations. For Fiscal Year 2023, Fiscal Year 2022, and Fiscal Year 2021, the Company recorded lease expense of $104.4 million, $90.9 million, and $79.7 million of which short-term and variable lease payments were $24.8 million, $18.9 million, and $17.7 million respectively. As of January 28, 2024, the weighted-average remaining lease term and weighted-average discount rate for operating leases was 11.8 years and 8.4%, respectively. As of January 29, 2023, the weighted-average remaining lease term and weighted-average discount rate for operating leases was 12.0 years and 8.4%, respectively. Cash flows used in operating activities related to operating leases were approximately $95.7 million, $76.8 million, and $67.9 million for Fiscal Years 2023, 2022, and 2021, respectively. The table below presents the maturity of lease liabilities as of January 28, 2024 (in thousands): Operating Leases 2024 $ 70,522 2025 77,677 2026 74,844 2027 70,932 2028 71,866 Thereafter 534,553 Total lease payments 900,394 Less: interest 343,596 Present value of lease liabilities $ 556,798 The Company maintains arrangements with certain local government agencies which provide for certain ad valorem tax incentives in connection with the Company’s capital investment in property, plant, and equipment purchases to outfit new facilities over a specified timeframe. To facilitate the incentives, the Company conveys the purchased equipment to the local government agency and will lease the equipment from such agency for nominal consideration. Upon termination of the lease, including early termination, the equipment will be conveyed to the Company for a nominal fee. |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 12 Months Ended |
Jan. 28, 2024 | |
Equity [Abstract] | |
Stockholders’ Equity (Deficit) | Stockholders’ Equity (Deficit) Common Stock Voting Rights Holders of the Company’s Class A and Class B common stock are entitled to vote together as a single class on all matters submitted to a vote or for the consent of the stockholders of the Company, unless otherwise required by law or the Company’s amended and restated certificate of incorporation. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. Dividends Subject to the preferences applicable to any series of preferred stock, if any, outstanding, holders of Class A and Class B common stock are entitled to share equally, on a per share basis, in dividends and other distributions of cash, property or securities of the Company. Liquidation Subject to the preferences applicable to any series of preferred stock, if any, outstanding, in the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of the Company, all assets of the Company available for distribution to common stockholders would be divided among and paid ratably to holders of Class A and Class B common stock. Conversion of Class B Common Stock Voluntary Conversion Each share of Class B common stock is convertible into one fully paid and nonassessable share of Class A common stock at the option of the holder thereof with the prior written consent of the Company. On May 8, 2020, Buddy Chester Sub LLC, a wholly-owned subsidiary of the Sponsors, converted 17,584,098 shares of the Company’s Class B common stock into Class A common stock. On May 11, 2020, Buddy Chester Sub LLC entered into a variable forward purchase agreement (the “Contract”) to deliver up to 17,584,098 shares of the Company’s Class A common stock at the exchange date, with the number of shares to be issued based on the trading price of the Company’s common stock during a 20-day observation period. On each of May 15, 2023 and May 16, 2023, Buddy Chester Sub LLC settled its obligations under the Contract and delivered a total of 17,584,098 shares. On April 12, 2021, Argos Intermediate Holdco I Inc. (“Argos Holdco”) converted 6,150,000 shares of the Company’s Class B common stock into Class A common stock and sold such Class A common stock. On January 9, 2024, Buddy Chester Sub LLC converted 12,325,000 shares of the Company’s Class B common stock into Class A common stock and sold such Class A common stock. Automatic Conversion All shares of Class B common stock shall automatically, without further action by any holder, be converted into an identical number of shares of fully paid and nonassessable Class A common stock (i) on the first trading day on or after the date on which the outstanding shares of Class B common stock constitute less than 7.5% of the aggregate number of shares of common stock then outstanding, or (ii) upon the occurrence of an event, specified by the affirmative vote (or written consent) of the holders of a majority of the then-outstanding shares of Class B common stock, voting as a separate class. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock (i) upon the sale or transfer of such share of Class B common stock, except for certain transfers described in the Company’s amended and restated certificate of incorporation, including transfers to affiliates of the holder and another holder of Class B common stock, or (ii) if the holder is not an affiliate of any of the Sponsors. Preferred Stock Preferred stock may be issued from time to time by the Company for such consideration as may be fixed by the board of directors. Except as otherwise required by law, holders of any series of preferred stock shall be entitled to only such voting rights, if any, as shall expressly be granted by the Company’s amended and restated certificate of incorporation (including any certificate of designation relating to such series of preferred stock). |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Jan. 28, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation 2022 Omnibus Incentive Plan In July 2022, the Company’s stockholders approved the Chewy, Inc. 2022 Omnibus Incentive Plan (the “2022 Plan”) replacing the Chewy, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”). The 2022 Plan became effective on July 14, 2022 and allows for the issuance of up to 40.0 million shares of Class A common stock and 1.0 million shares for new grants rolled over from the 2019 Plan. No awards may be granted under the 2022 Plan after July 2032. The 2022 Plan provides for the grants of: (i) options, including incentive stock options and non-qualified stock options, (ii) restricted stock units, (iii) other share-based awards, including share appreciation rights, phantom stock, restricted shares, performance shares, deferred share units, and share-denominated performance units, (iv) cash awards, (v) substitute awards, and (vi) dividend equivalents (collectively the “awards”). The awards may be granted to (i) the Company’s employees, consultants, and non-employee directors, (ii) employees of the Company’s affiliates and subsidiaries, and (iii) consultants of the Company’s subsidiaries. Service and Performance-Based Awards The Company granted restricted stock units which vested upon satisfaction of both service-based vesting conditions and company performance-based vesting conditions (“PRSUs”), subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for PRSUs over the requisite service period and accounted for forfeitures as they occur. Service and Performance-Based Awards Activity The following table summarizes the activity related to the Company’s PRSUs for Fiscal Year 2023 (in thousands, except for weighted average grant date fair value): Number of PRSUs Weighted Average Grant Date Fair Value Unvested and outstanding as of January 29, 2023 2,206 $ 36.22 Granted 500 $ 26.91 Vested (1,936) $ 35.89 Forfeited (217) $ 37.38 Unvested and outstanding as of January 28, 2024 553 $ 28.49 The following table summarizes the weighted average grant-date fair value of PRSUs granted and total fair value of PRSUs vested for the periods presented: Fiscal Year 2023 2022 2021 Weighted average grant-date fair value of PRSUs $ 26.91 $ 43.59 $ 80.85 Total fair value of vested PRSUs (in millions) $ 74.8 $ 145.5 $ 318.2 As of January 28, 2024, total unrecognized compensation expense related to unvested PRSUs was $13.7 million and is expected to be recognized over a weighted-average expected performance period of 2.0 years. During Fiscal Year 2023, Fiscal Year 2022, and Fiscal Year 2021, vesting occurred for 0.1 million, 0.2 million, and 0.2 million PRSUs, respectively, that were previously granted to an employee of PetSmart. For accounting purposes, the issuance of Class A common stock upon vesting of these PRSUs is treated as a distribution to a parent entity because both the Company and PetSmart are controlled by affiliates of BC Partners. The fair value for PRSUs with a Company performance-based vesting condition is established based on the market price of the Company’s Class A common stock on the date of grant. Service-Based Awards The Company granted restricted stock units with service-based vesting conditions (“RSUs”) which vested subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for RSUs on a straight-line basis over the requisite service period and accounted for forfeitures as they occur. Service-Based Awards Activity The following table summarizes the activity related to the Company’s RSUs for Fiscal Year 2023 (in thousands, except for weighted average grant date fair value): Number of RSUs Weighted Average Grant Date Fair Value Unvested and outstanding as of January 29, 2023 10,813 $ 45.56 Granted 14,228 $ 31.00 Vested (4,501) $ 45.61 Forfeited (3,152) $ 39.94 Unvested and outstanding as of January 28, 2024 17,388 $ 34.65 The following table summarizes the weighted average grant-date fair value of RSUs granted and total fair value of RSUs vested for the periods presented: Fiscal Year 2023 2022 2021 Weighted average grant-date fair value of RSUs $ 31.00 $ 41.54 $ 72.05 Total fair value of vested RSUs (in millions) $ 154.6 $ 47.6 $ 19.5 As of January 28, 2024, total unrecognized compensation expense related to unvested RSUs was $456.5 million and is expected to be recognized over a weighted-average expected performance period of 2.5 years. The fair value for RSUs is established based on the market price of the Company’s Class A common stock on the date of grant. As of January 28, 2024, there were 26.0 million additional shares of Class A common stock reserved for future issuance under the 2022 Plan. Share-Based Compensation Expense Share-based compensation expense is included within selling, general and administrative expenses in the consolidated statements of operations. The Company recognized share-based compensation expense as follows (in thousands): Fiscal Year 2023 2022 2021 PRSUs $ 1,896 $ 12,710 $ 27,423 RSUs 237,211 145,412 50,349 Total share-based compensation expense $ 239,107 $ 158,122 $ 77,772 |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 28, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Chewy is subject to taxation in the U.S. and various state, local, and foreign jurisdictions. Income taxes as presented in the Company’s consolidated financial statements have been prepared based on Chewy’s separate return method. As a result of the Transactions, the Company no longer files consolidated or combined state and local income tax returns with affiliates of BC Partners and no longer considers hypothetical net operating losses or credits associated with such income tax returns. For Fiscal Year 2023 and Fiscal Year 2022, the Company recorded a current income tax provision of $8.7 million and $2.6 million, respectively. For Fiscal Year 2023 and Fiscal Year 2022, the Company’s income tax provisions for the foreign jurisdictions were not material. For Fiscal Year 2021, the Company did not have a current or deferred provision for income taxes for any taxing jurisdiction. The Company’s effective income tax rate reconciliation is as follows for the periods presented: Fiscal Year 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Foreign earnings, net of taxes 2.8 % — % — % State income taxes, net of federal tax benefit (4.1) % 3.8 % 10.9 % Change in tax rate — % 2.5 % (0.2) % Share-based compensation and other nondeductible expenses 16.8 % (24.4) % 73.0 % Tax credits (43.7) % (22.2) % 36.1 % Other 0.9 % 3.3 % (0.1) % Change in valuation allowance 24.2 % 21.0 % (140.7) % Effective rate 17.9 % 5.0 % — % The temporary differences which comprise the Company’s deferred taxes are as follows for the periods presented (in thousands): As of January 28, 2024 January 29, 2023 Deferred tax assets: Operating lease liabilities $ 144,965 $ 129,786 Inventories 13,313 10,897 Share-based compensation 32,029 37,085 Accrued expenses and reserves 16,495 13,468 Net operating loss carryforwards 130,382 177,627 Tax credit carryforwards 52,166 40,391 Capitalized research expenditures 122,600 36,535 Other 3,248 7,971 Total deferred tax assets 515,198 453,760 Less: valuation allowance 281,119 230,692 Deferred tax assets, net of valuation allowance 234,079 223,068 Deferred tax liabilities: Operating lease right-of-use assets 123,563 109,827 Depreciation 101,235 107,014 Prepaids 7,289 6,227 Other 1,992 — Total deferred tax liabilities 234,079 223,068 Net deferred tax assets $ — $ — Valuation Allowance The valuation allowance increased by $50.4 million during Fiscal Year 2023. The increase in the valuation allowance primarily relates to: (i) an increase of $44.6 million relating to current year activity, (ii) an increase of $4.6 million relating to an increase in federal tax credits, and (iii) an increase of $1.2 million relating to miscellaneous adjustments to the Company’s deferred tax assets and liabilities. Beginning in 2022, the 2017 Tax Cuts and Jobs Act (the “TCJA”) amended Section 174 to eliminate current-year deductibility of research and experimentation (“R&E”), and software development costs, and instead requires taxpayers to charge their R&E expenditures to a capital account amortized over five years (15 years for expenditures attributable to R&E activity performed outside the United States). As of January 28, 2024, the Company recorded deferred tax assets of $122.6 million, before any valuation allowance, with respect to capitalized R&E expenditures. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. The Company considers the scheduled reversal of deferred tax liabilities (including the effect of available carryback and carryforward periods) in making this assessment. To fully utilize the net operating loss (“NOL”) and tax credit carryforwards the Company will need to generate sufficient future taxable income in each respective jurisdiction. Due to the Company’s history of losses, it is more likely than not that its deferred tax assets will not be realized as of January 28, 2024. Accordingly, the Company has established a full valuation allowance on its net deferred tax assets. A valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized. To the extent that a valuation allowance has been established and it is subsequently determined that it is more likely than not that the deferred tax assets will be recovered, the valuation allowance will be released. The following summarizes the activity related to valuation allowances on deferred tax assets (in thousands): Fiscal Year 2023 2022 2021 Valuation allowance, as of beginning of period $ 230,692 $ 217,032 $ 124,012 Valuation allowances established 50,434 14,970 93,199 Changes to existing valuation allowances (7) (1,310) (179) Valuation allowance, as of end of period $ 281,119 $ 230,692 $ 217,032 Net Operating Loss and Tax Credit Carryforwards As of January 28, 2024, the Company had federal, state, and foreign NOL carryforwards of $492.7 million, $488.1 million and $20.4 million, respectively. The federal NOL carryforwards have no expiration and can only be used to offset 80% of the Company’s future taxable income. The state NOL carryforwards include $210.6 million with definitive expiration dates and $277.5 million with no expiration. The state NOLs are presented as an apportioned amount. The foreign NOL carryforwards have a 20-year expiration and can be used to offset 100% of the Company’s future taxable income. As of January 28, 2024, the Company recorded deferred tax assets of $130.4 million, before any valuation allowance, with respect to federal and state NOL carryforwards. These deferred tax assets expire as follows (in thousands): 2024 $ 91 2025 3 2026 64 2032 13 2033 128 Thereafter 15,359 Indefinite 114,724 Total loss carryforwards $ 130,382 The Company participates in various federal and state credit programs which provide credits against current and future tax liabilities. Credits not used in the current year are carried forward to future years. As of January 28, 2024, the Company recorded a deferred tax asset of $52.2 million, before any valuation allowance, with respect to federal and state tax credit carryforwards. These deferred tax assets expire as follows (in thousands): Year of Expiration Research and Development Work Opportunity Quality Jobs Tax Credit Total 2025 $ — $ — $ 128 $ 128 2026 90 — 183 273 2027 217 — 213 430 2038 17 — — 17 2040 — 417 — 417 2041 7,775 1,142 — 8,917 2042 16,267 2,096 — 18,363 2043 23,621 — — 23,621 $ 47,987 $ 3,655 $ 524 $ 52,166 Uncertain Tax Positions In connection with the Transactions, the Company became obligor on $19.7 million of unrecognized tax benefits, inclusive of $1.4 million in interest through Fiscal Year 2023, which is fully indemnified by affiliates of BC Partners and will not have a material impact to the Company’s effective tax rate. The Company does not expect changes in the unrecognized tax benefits within the next 12 months that would have a material impact to its consolidated financial statements. The Company is no longer subject to U.S. state, or local tax examinations by tax authorities for years prior to Fiscal Year 2021 other than a few exceptions. The following table provides a summary of gross unrecognized income tax benefits (in thousands): Fiscal Year 2023 2022 2021 Beginning balance $ — $ — $ — Additions due to parent reorganization transaction 18,298 — — Ending balance $ 18,298 $ — $ — Tax Sharing Agreement The tax sharing agreement entered into between the Company, PetSmart, and Argos Holdco during Fiscal Year 2019 was terminated by all parties to the agreement on October 30, 2023 in connection with the Transactions. No remaining obligations exist between the parties. During Fiscal Years 2023 and 2022, the Company paid $10.3 million and $2.8 million, respectively, pursuant to the tax sharing agreement. As of January 29, 2023, the Company had a payable related to the tax sharing agreement of $5.3 million. Income Tax Payments and Liabilities In connection with the Transactions, Chewy assumed $1.9 billion in income taxes which were fully indemnified by affiliates of BC Partners. During Fiscal Year 2023, the Company paid $1.8 billion in federal and state income taxes relating to the taxes assumed in connection with the Transactions and had an income tax payable of $108.9 million on such assumed income taxes as of January 28, 2024. With respect to income taxes other than the Transactions, the Company paid $5.0 million in federal, state, and foreign income taxes during Fiscal Year 2023 and had an income tax payable of $4.4 million as of January 28, 2024. Inflation Reduction Act |
Earnings (Loss) per Share
Earnings (Loss) per Share | 12 Months Ended |
Jan. 28, 2024 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic and diluted earnings (loss) per share attributable to the Company’s common stockholders are presented using the two-class method required for participating securities. Under the two-class method, net income (loss) attributable to the Company’s common stockholders is determined by allocating undistributed earnings between common stock and participating securities. Undistributed earnings for the periods presented are calculated as net income (loss) less distributed earnings. Undistributed earnings are allocated proportionally to the Company’s common Class A and Class B stockholders as both classes are entitled to share equally, on a per share basis, in dividends and other distributions. Basic and diluted earnings (loss) per share are calculated by dividing net income (loss) attributable to the Company’s common stockholders by the weighted-average shares outstanding during the period. The following table sets forth basic and diluted earnings (loss) per share attributable to the Company’s common stockholders for the periods presented (in thousands, except per share data): Fiscal Year 2023 2022 2021 Basic and diluted earnings (loss) per share Numerator Earnings (loss) attributable to common Class A and Class B stockholders $ 39,580 $ 49,899 $ (75,207) Denominator Weighted-average common shares used in computing earnings per share: Basic 429,457 422,331 417,218 Effect of dilutive share-based awards 2,583 5,439 — Diluted 432,040 427,770 417,218 Anti-dilutive share-based awards excluded from diluted common shares 11,058 5,377 9,773 Earnings (loss) per share attributable to common Class A and Class B stockholders: Basic $ 0.09 $ 0.12 $ (0.18) Diluted $ 0.09 $ 0.12 $ (0.18) |
Certain Relationships and Relat
Certain Relationships and Related Party Transactions | 12 Months Ended |
Jan. 28, 2024 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Party Transactions | Certain Relationships and Related Party Transactions As of January 28, 2024, the Company had a receivable from affiliates of BC Partners of $48.3 million with respect to the indemnification for certain tax liabilities in connection with the Transactions, which was included in prepaid expenses and other current assets on the Company’s consolidated balance sheets. As of January 28, 2024, the Company did not have any amounts due to/from PetSmart. As of January 29, 2023, the Company had a net payable to PetSmart of $60.3 million, which was included in accrued expenses and other current liabilities on the Company’s consolidated balance sheets; the majority of this balance was extinguished as the result of a $54.7 million noncash settlement during Fiscal Year 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Pay vs Performance Disclosure | |||
Net income (loss) | $ 39,580 | $ 49,899 | $ (75,207) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jan. 28, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 28, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) accounting standards codification (“ASC”). In connection with the Transactions described in Note 1 – Description of Business, the Company has provided restated consolidated financial statements and related notes for the historical comparative periods in this 10-K Report reflecting the operations of Chewy Pharmacy KY as part of the Company’s consolidated financial statements. This restatement was accounted for as a common control transaction, with Chewy Pharmacy KY’s net assets transferred at the previous parent company’s historical basis. |
Fiscal Year | Fiscal Year The Company has a 52- or 53-week fiscal year ending each year on the Sunday that is closest to January 31 of that year. The Company’s 2023 fiscal year ended January 28, 2024 and included 52 weeks (“Fiscal Year 2023”). The Company’s 2022 fiscal year ended January 29, 2023 and included 52 weeks (“Fiscal Year 2022”). The Company’s 2021 fiscal year ended January 30, 2022 and included 52 weeks (“Fiscal Year 2021”). |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates GAAP requires management to make certain estimates, judgments, and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates and judgments. Actual results could differ from those estimates. Key estimates relate primarily to determining the net realizable value and demand for inventory, useful lives associated with property and equipment and intangible assets, valuation allowances with respect to deferred tax assets, contingencies, self-insurance accruals, evaluation of sales tax positions, and the valuation and assumptions underlying share-based compensation and equity warrants. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents primarily consist of institutional money market funds, U.S. Treasury securities, certificates of deposit, and commercial paper and are carried at cost, which approximates fair value. |
Concentration of Credit Risk | Concentration of Credit Risk |
Investments | Investments The Company generally invests its excess cash in AAA-rated money market funds and investment grade short- to intermediate-term fixed income securities, including U.S. Treasury securities, certificates of deposit, and commercial paper. Such investments are included in cash and cash equivalents or marketable securities on the accompanying consolidated balance sheets and are classified based on original maturity. The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents and considers all highly liquid investments with an original maturity greater than 90 days and less than one year to be marketable securities. Marketable fixed income securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss). Each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected credit losses, as well as its ability and intent to hold the investment until a forecasted recovery of the carrying value occurs. Expected credit losses are recorded as an allowance through other income (expense), net on the Company’s consolidated statements of operations. Equity investments in public companies that have readily determinable fair values are included in marketable securities on the Company’s consolidated balance sheets and measured at fair value with changes recognized in other income (expense), net on the Company’s consolidated statements of operations. The Company holds equity warrants giving it the right to acquire stock of other companies. These warrants are classified as derivative assets and are recorded within other non-current assets on the Company’s consolidated balance sheets with gains and losses recognized in other income (expense), net on the Company’s consolidated statements of operations. These warrants are subject to vesting requirements and the fair value established at contract inception is recognized as a deferred credit reported within other long-term liabilities on the Company’s consolidated balance sheets and is amortized as the vesting requirements are achieved. For more information, see Note 4 - Financial Instruments. |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories The Company’s inventories represent finished goods, consist of products available for sale and are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated over the estimated useful lives of the related assets using the straight-line method. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term (including renewals that are reasonably assured) or the estimated useful lives of the improvements. For software application projects which develop new software or enhance existing licensed or internally-developed software, external costs and certain internal costs, including payroll and payroll-related costs of employees, directly associated with developing these software applications for internal use are capitalized subsequent to the preliminary stage of development. Internal-use software costs are amortized using the straight-line method over the estimated useful life of the software when the project is substantially complete and ready for its intended use. The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gains or losses are included in the Company’s results of operations for the respective period. For more information, see Note 5 - Property and Equipment, net. |
Leases | Leases The Company has operating and finance lease agreements for its fulfillment and customer service centers, corporate offices, and certain equipment. The Company determines if an arrangement contains a lease at inception based on the ability to control a physically distinct asset. Operating and finance lease right-of-use assets are recorded in the consolidated balance sheets based on the initial measurement of the lease liability as adjusted to include prepaid rent and initial direct costs less any lease incentives received. Lease liabilities are measured at the commencement date based on the present value of the lease payments over the lease term. Lease payments are generally fixed but may include provisions for future rent increases based on a market index. The Company separately accounts for lease and non-lease components within lease agreements; the non-lease components primarily relate to common area maintenance for real estate leases. The Company uses its incremental borrowing rate to present value the lease liability as key inputs to determine the interest rate implicit in the lease are not shared by lessors. Operating lease expense is recorded on a straight-line basis over the lease term. Right-of-use assets and lease liabilities for short-term leases are not recognized in the consolidated balance sheets. Payments for short-term leases are recognized in the consolidated statements of operations on a straight-line basis over the lease term. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized. The Company evaluates goodwill for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has the option to first perform a qualitative assessment of its goodwill to determine whether it is necessary to perform a quantitative impairment test. If the Company concludes via the qualitative assessment that it is more likely than not that goodwill is impaired, management performs the quantitative impairment test to evaluate the recoverability of goodwill by comparing the carrying value of the Company’s reporting units to their fair values. An impairment charge is recorded for the amount by which the carrying amounts exceed the fair values of the reporting units, with the loss recognized not exceeding the total amount of goodwill. The Company did not record any goodwill impairment during the periods presented. |
Intangible Assets | Intangible Assets |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Self-Insurance Accruals | Self-Insurance Accruals The Company uses a combination of self-insurance programs and large-deductible purchased insurance to provide for the costs of medical and workers’ compensation claims. The Company periodically evaluates its level of insurance coverage and adjusts its insurance levels based on risk tolerance and premium expense. Liabilities for the risks the Company retains, including estimates of claims incurred but not reported, are not discounted and are estimated, in part, by considering historical cost experience, demographic and severity factors, and judgments about current and expected levels of cost per claim and retention levels. Additionally, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. The Company believes the actuarial methods are appropriate for measuring these self-insurance accruals. However, based on the number of claims and the length of time from incurrence of the claims to ultimate settlement, the use of any estimation method is sensitive to the assumptions and factors described above. Accordingly, changes in these assumptions and factors can affect the estimated liability and those amounts may be different than the actual costs paid to settle the claims. |
Defined Contribution Plans | Defined Contribution Plans The Company maintains a 401(k) defined contribution plan which covers all employees who meet minimum requirements and elect to participate. The Company is currently matching employee contributions, up to specified percentages of those contributions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1-Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2-Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3-Valuations based on unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable, and accrued expenses and other current liabilities approximate fair value based on the short-term maturities of these instruments. |
Loss Contingencies | Loss Contingencies Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities and such assessments inherently involve an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is estimable, the liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed. Unasserted claims that are not considered probable of being asserted and those for which an unfavorable outcome is not reasonably possible have not been disclosed. |
Revenue Recognition | Revenue Recognition Chewy recognizes revenues from product sales when the customer orders an item through Chewy’s websites or mobile applications via the electronic shopping cart, funds are collected from the customer and the item is shipped from one of the Company’s fulfillment centers and delivered to the carrier. Certain products are shipped directly from manufacturers to Chewy customers. For all of the preceding, the Company is considered to be a principal to these transactions and revenue is recognized on a gross basis as the Company is (i) the primary entity responsible for fulfilling the promise to provide the specified products in the arrangement with the customer and provides the primary customer service for all products sold on Chewy’s websites or mobile applications, (ii) has inventory risk before the products have been transferred to a customer and maintains inventory risk upon accepting returns , and (iii) has discretion in establishing the price for the specified products sold on Chewy’s websites or mobile applications. Chewy primarily generates net sales from sales of pet food, pet products, pet medications and other pet health products, and related shipping fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. To encourage customers to purchase its products, the Company periodically provides incentive offers. Generally, these promotions include current discount offers, such as percentage discounts off current purchases and other similar offers. These offers, when accepted by customers, are treated as a reduction to the transaction price. Revenue typically consists of the consideration received from the customer when the order is executed less a refund allowance, which is estimated using historical experience. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes the purchase price of inventory sold, freight costs associated with inventory, shipping supply costs, inventory shrinkage costs and valuation adjustments and reductions for promotions and discounts offered by the Company’s vendors. Vendor Rebates |
Selling, General and Administrative | Selling, General and Administrative Selling, general and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions, including accounting, finance, tax, legal, and human resources; costs associated with use by these functions of facilities and equipment, such as depreciation expense and rent; share-based compensation expense, professional fees and other general corporate costs. Fulfillment |
Share-Based Compensation | Share-Based Compensation The Company recognizes share-based compensation expense based on the equity award’s grant date fair value. For grants of restricted stock units subject to service-based and company performance-based vesting conditions, the fair value is established based on the market price on the date of the grant. For grants of restricted stock units subject to market-based vesting conditions, the fair value is established using the Monte Carlo simulation lattice model. The determination of the fair value of share-based awards is affected by the Company’s stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. The Company accounts for forfeitures as they occur. The grant date fair value of each restricted stock unit is amortized over the requisite service period. |
Advertising and Marketing | Advertising and Marketing |
Interest Income (Expense), net | Interest Income (Expense), net |
Other Income (Expense), net | Other Income (Expense), net |
Income and Other Taxes | Income and Other Taxes Income taxes are accounted for under the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The Company’s calculation relies on several factors, including pre-tax earnings and losses, differences between tax laws and accounting rules, statutory tax rates, uncertain tax positions, and valuation allowances. Valuation allowances are established when, in the Company’s judgment, it is more likely than not that its deferred tax assets will not be realized based on all available evidence. Management considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. Chewy determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. The Company records interest and penalties related to uncertain tax positions within interest expense and selling, general and administrative expenses, respectively, in the consolidated statements of operations. The Company collects and remits sales tax in jurisdictions in which it has a physical presence or it believes nexus exists. The Company maintains liabilities for potential exposure in states where taxability is uncertain and the Company did not collect sales tax. |
Segments | Segments |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. In September 2022, the FASB issued this Accounting Standards Update (“ASU”) which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period. This update became effective at the beginning of the Company’s 2023 fiscal year. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . In December 2023, the FASB issued this ASU to update income tax disclosure requirements, primarily related to the income tax rate reconciliation and income taxes paid information. This update is effective beginning with the Company’s 2025 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued this ASU to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective beginning with the Company’s 2024 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. In June 2022, the FASB issued this ASU to clarify the guidance when measuring the fair value of an equity security subject to contractual sale restrictions that prohibit the sale of an equity security. This update is effective at the beginning of the Company’s 2024 fiscal year, with early adoption permitted. The Company does not believe the adoption of this standard will have a material impact on its consolidated financial statements. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life The following is a summary of property and equipment, net (in thousands): As of January 28, 2024 January 29, 2023 Furniture, fixtures and equipment $ 174,092 $ 162,618 Computer equipment 75,677 67,849 Internal-use software 183,380 139,082 Leasehold improvements 312,123 246,386 Construction in progress 82,014 93,535 827,286 709,470 Less: accumulated depreciation and amortization 305,988 230,585 Property and equipment, net $ 521,298 $ 478,885 |
Estimated Useful Lives of Intangible Assets | The estimated useful lives of intangible assets are as follows: Developed technology 3 years The following table provides information about the Company’s identified intangible assets (in thousands, except for weighted-average remaining life): As of January 28, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted-Average Remaining Life (years) Developed technology $ 11,596 $ (7,633) $ 3,963 1.0 Total intangible assets $ 11,596 $ (7,633) $ 3,963 1.0 |
Schedule of Accrued Expenses and Other Current Liabilities | The following table presents the components of accrued expenses and other current liabilities (in thousands): As of January 28, 2024 January 29, 2023 Outbound fulfillment $ 491,251 $ 370,095 Advertising and marketing 106,339 99,593 Payroll liabilities 83,880 66,799 Accrued expenses and other 324,467 258,047 Total accrued expenses and other current liabilities $ 1,005,937 $ 794,534 |
Schedule of Interest Income and Expense | The following table provides additional information about the Company’s interest income (expense), net (in thousands): Fiscal Year 2023 2022 2021 Interest income $ 62,083 $ 11,865 $ 523 Interest expense (3,582) (2,575) (2,164) Interest income (expense), net $ 58,501 $ 9,290 $ (1,641) |
Schedule of Other Nonoperating Income (Expense) | The following table provides additional information about the Company’s other income (expense), net (in thousands): Fiscal Year 2023 2022 2021 Change in fair value of equity warrants $ 13,079 $ (13,340) $ — Foreign currency transaction gains 285 174 — Change in fair value of equity investments (10) — — Other income (expense), net $ 13,354 $ (13,166) $ — |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Estimated Purchase Price, Net of Cash Acquired | The following table reconciles the purchase price to the cash paid for the acquisition, net of cash acquired (in thousands): Purchase price $ 43,281 Less: cash acquired 2,881 Cash paid for acquisition of business, net of cash acquired $ 40,400 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the assets acquired and liabilities assumed as of the acquisition date (in thousands): Assets acquired: Cash and cash equivalents $ 2,881 Accounts receivable 104 Goodwill 39,442 Identified intangible assets 1,510 Other current and non-current assets 318 Liabilities assumed: Other current and long-term liabilities (974) Purchase price $ 43,281 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Cash and Cash Equivalents | The following table includes a summary of financial instruments measured at fair value as of January 28, 2024 (in thousands): Level 1 Level 2 Level 3 Cash $ 602,232 $ — $ — Money market funds — — — Cash and cash equivalents 602,232 — — U.S. Treasury securities 531,592 — — Equity investments 193 — — Marketable securities 531,785 — — Equity warrants — — 2,219 Total financial instruments $ 1,134,017 $ — $ 2,219 The following table includes a summary of financial instruments measured at fair value as of January 29, 2023 (in thousands): Level 1 Level 2 Level 3 Cash $ 301,641 $ — $ — Money market funds 30,000 — — Cash and cash equivalents 331,641 — — U.S. Treasury securities 346,926 — — Equity investments 18 — — Marketable securities 346,944 — — Equity warrants — — 31,622 Total financial instruments $ 678,585 $ — $ 31,622 |
Summary of Changes in Fair Value for Financial Instruments Using Unobservable Level 3 Inputs | The following table summarizes the change in fair value for financial instruments using unobservable Level 3 inputs (in thousands): Fiscal Year 2023 2022 Beginning balance $ 31,622 $ — Equity warrants acquired — 44,962 Change in fair value of equity warrants (29,403) (13,340) Ending balance $ 2,219 $ 31,622 |
Fair Value Measurement Valuation Assumptions | The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the equity warrants as of January 28, 2024: Range Fair Value Valuation Techniques Unobservable Input Min Max Weighted Average Equity warrants $2,219 Black-Scholes and Monte Carlo Probability of vesting 0% 50% 18% Equity volatility 35% 85% 77% |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | The estimated useful lives of property and equipment are principally as follows: Furniture, fixtures and equipment 5 to 10 years Computer equipment and software 3 to 5 years Leasehold improvements and finance lease assets Shorter of the lease term or estimated useful life The following is a summary of property and equipment, net (in thousands): As of January 28, 2024 January 29, 2023 Furniture, fixtures and equipment $ 174,092 $ 162,618 Computer equipment 75,677 67,849 Internal-use software 183,380 139,082 Leasehold improvements 312,123 246,386 Construction in progress 82,014 93,535 827,286 709,470 Less: accumulated depreciation and amortization 305,988 230,585 Property and equipment, net $ 521,298 $ 478,885 |
Identified Intangible Assets (T
Identified Intangible Assets (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The estimated useful lives of intangible assets are as follows: Developed technology 3 years The following table provides information about the Company’s identified intangible assets (in thousands, except for weighted-average remaining life): As of January 28, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted-Average Remaining Life (years) Developed technology $ 11,596 $ (7,633) $ 3,963 1.0 Total intangible assets $ 11,596 $ (7,633) $ 3,963 1.0 |
Schedule of Future Estimated Amortization of Intangible Assets | The future estimated amortization of intangible assets is as follows (in thousands): Amortization Expense 2024 $ 3,585 2025 378 Total intangible asset amortization $ 3,963 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Leases [Abstract] | |
Operating Lease-related Assets and Liabilities | The table below presents the operating lease-related assets and liabilities recorded on the consolidated balance sheets (in thousands): As of Leases Balance Sheet Classification January 28, 2024 January 29, 2023 Assets Operating Operating lease right-of-use assets $ 474,617 $ 423,518 Total operating lease assets $ 474,617 $ 423,518 Liabilities Current Operating Accrued expenses and other current liabilities $ 29,003 $ 27,646 Non-current Operating Operating lease liabilities 527,795 471,821 Total operating lease liabilities $ 556,798 $ 499,467 |
Maturity of Operating Lease liabilities | The table below presents the maturity of lease liabilities as of January 28, 2024 (in thousands): Operating Leases 2024 $ 70,522 2025 77,677 2026 74,844 2027 70,932 2028 71,866 Thereafter 534,553 Total lease payments 900,394 Less: interest 343,596 Present value of lease liabilities $ 556,798 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Service and Performance Based-Awards Activity | The following table summarizes the activity related to the Company’s PRSUs for Fiscal Year 2023 (in thousands, except for weighted average grant date fair value): Number of PRSUs Weighted Average Grant Date Fair Value Unvested and outstanding as of January 29, 2023 2,206 $ 36.22 Granted 500 $ 26.91 Vested (1,936) $ 35.89 Forfeited (217) $ 37.38 Unvested and outstanding as of January 28, 2024 553 $ 28.49 The following table summarizes the activity related to the Company’s RSUs for Fiscal Year 2023 (in thousands, except for weighted average grant date fair value): Number of RSUs Weighted Average Grant Date Fair Value Unvested and outstanding as of January 29, 2023 10,813 $ 45.56 Granted 14,228 $ 31.00 Vested (4,501) $ 45.61 Forfeited (3,152) $ 39.94 Unvested and outstanding as of January 28, 2024 17,388 $ 34.65 |
Summary of Weighted Average Grant-Date Fair Value and Total Fair Value of Service and Performance Based-Awards Activity | The following table summarizes the weighted average grant-date fair value of PRSUs granted and total fair value of PRSUs vested for the periods presented: Fiscal Year 2023 2022 2021 Weighted average grant-date fair value of PRSUs $ 26.91 $ 43.59 $ 80.85 Total fair value of vested PRSUs (in millions) $ 74.8 $ 145.5 $ 318.2 The following table summarizes the weighted average grant-date fair value of RSUs granted and total fair value of RSUs vested for the periods presented: Fiscal Year 2023 2022 2021 Weighted average grant-date fair value of RSUs $ 31.00 $ 41.54 $ 72.05 Total fair value of vested RSUs (in millions) $ 154.6 $ 47.6 $ 19.5 |
Schedule of Compensation Expense | The Company recognized share-based compensation expense as follows (in thousands): Fiscal Year 2023 2022 2021 PRSUs $ 1,896 $ 12,710 $ 27,423 RSUs 237,211 145,412 50,349 Total share-based compensation expense $ 239,107 $ 158,122 $ 77,772 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate Reconciliation | The Company’s effective income tax rate reconciliation is as follows for the periods presented: Fiscal Year 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Foreign earnings, net of taxes 2.8 % — % — % State income taxes, net of federal tax benefit (4.1) % 3.8 % 10.9 % Change in tax rate — % 2.5 % (0.2) % Share-based compensation and other nondeductible expenses 16.8 % (24.4) % 73.0 % Tax credits (43.7) % (22.2) % 36.1 % Other 0.9 % 3.3 % (0.1) % Change in valuation allowance 24.2 % 21.0 % (140.7) % Effective rate 17.9 % 5.0 % — % |
Schedule of Deferred Tax Assets and Liabilities | The temporary differences which comprise the Company’s deferred taxes are as follows for the periods presented (in thousands): As of January 28, 2024 January 29, 2023 Deferred tax assets: Operating lease liabilities $ 144,965 $ 129,786 Inventories 13,313 10,897 Share-based compensation 32,029 37,085 Accrued expenses and reserves 16,495 13,468 Net operating loss carryforwards 130,382 177,627 Tax credit carryforwards 52,166 40,391 Capitalized research expenditures 122,600 36,535 Other 3,248 7,971 Total deferred tax assets 515,198 453,760 Less: valuation allowance 281,119 230,692 Deferred tax assets, net of valuation allowance 234,079 223,068 Deferred tax liabilities: Operating lease right-of-use assets 123,563 109,827 Depreciation 101,235 107,014 Prepaids 7,289 6,227 Other 1,992 — Total deferred tax liabilities 234,079 223,068 Net deferred tax assets $ — $ — |
Summary of Valuation Allowance | The following summarizes the activity related to valuation allowances on deferred tax assets (in thousands): Fiscal Year 2023 2022 2021 Valuation allowance, as of beginning of period $ 230,692 $ 217,032 $ 124,012 Valuation allowances established 50,434 14,970 93,199 Changes to existing valuation allowances (7) (1,310) (179) Valuation allowance, as of end of period $ 281,119 $ 230,692 $ 217,032 |
Summary of Operating Loss Carryforwards | These deferred tax assets expire as follows (in thousands): 2024 $ 91 2025 3 2026 64 2032 13 2033 128 Thereafter 15,359 Indefinite 114,724 Total loss carryforwards $ 130,382 |
Summary of Tax Credit Carryforwards | As of January 28, 2024, the Company recorded a deferred tax asset of $52.2 million, before any valuation allowance, with respect to federal and state tax credit carryforwards. These deferred tax assets expire as follows (in thousands): Year of Expiration Research and Development Work Opportunity Quality Jobs Tax Credit Total 2025 $ — $ — $ 128 $ 128 2026 90 — 183 273 2027 217 — 213 430 2038 17 — — 17 2040 — 417 — 417 2041 7,775 1,142 — 8,917 2042 16,267 2,096 — 18,363 2043 23,621 — — 23,621 $ 47,987 $ 3,655 $ 524 $ 52,166 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table provides a summary of gross unrecognized income tax benefits (in thousands): Fiscal Year 2023 2022 2021 Beginning balance $ — $ — $ — Additions due to parent reorganization transaction 18,298 — — Ending balance $ 18,298 $ — $ — |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 12 Months Ended |
Jan. 28, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings (Loss) Per Share | The following table sets forth basic and diluted earnings (loss) per share attributable to the Company’s common stockholders for the periods presented (in thousands, except per share data): Fiscal Year 2023 2022 2021 Basic and diluted earnings (loss) per share Numerator Earnings (loss) attributable to common Class A and Class B stockholders $ 39,580 $ 49,899 $ (75,207) Denominator Weighted-average common shares used in computing earnings per share: Basic 429,457 422,331 417,218 Effect of dilutive share-based awards 2,583 5,439 — Diluted 432,040 427,770 417,218 Anti-dilutive share-based awards excluded from diluted common shares 11,058 5,377 9,773 Earnings (loss) per share attributable to common Class A and Class B stockholders: Basic $ 0.09 $ 0.12 $ (0.18) Diluted $ 0.09 $ 0.12 $ (0.18) |
Description of Business (Detail
Description of Business (Details) $ in Billions | 12 Months Ended | |
Oct. 30, 2023 USD ($) | Jan. 28, 2024 vote | |
Class of Stock [Line Items] | ||
Related party transaction, maximum stockholder percentage | 50% | |
Related party transaction, amounts of transaction | $ | $ 1.9 | |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Common stock number of votes per share | 10 | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock number of votes per share | 1 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Narrative (Details) | 12 Months Ended | |||
Jan. 28, 2024 USD ($) d | Jan. 28, 2024 USD ($) segment | Jan. 29, 2023 USD ($) | Jan. 30, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable | $ 154,043,000 | $ 154,043,000 | $ 126,969,000 | |
Accounts receivable, settlement period | d | 5 | |||
Impairment charges | 0 | 0 | $ 0 | |
Fulfillment costs | 1,300,000,000 | 1,200,000,000 | 1,200,000,000 | |
Merchant processing fees | $ 234,000,000 | $ 207,700,000 | $ 183,800,000 | |
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Revenue Benchmark | Supplier Concentration Risk | Three largest suppliers | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk percentage | 39% | 38% | 35% | |
Customer Receivables | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable | $ 110,000,000 | $ 110,000,000 | $ 105,200,000 | |
Vendor Receivables | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable | $ 44,000,000 | $ 44,000,000 | $ 21,800,000 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Details) | Jan. 28, 2024 |
Furniture, fixtures and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Furniture, fixtures and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 |
Accounting Policies [Abstract] | ||
Outbound fulfillment | $ 491,251 | $ 370,095 |
Advertising and marketing | 106,339 | 99,593 |
Payroll liabilities | 83,880 | 66,799 |
Accrued expenses and other | 324,467 | 258,047 |
Total accrued expenses and other current liabilities | $ 1,005,937 | $ 794,534 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Schedule of Interest Income and Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Accounting Policies [Abstract] | |||
Interest income | $ 62,083 | $ 11,865 | $ 523 |
Interest expense | (3,582) | (2,575) | (2,164) |
Interest income (expense), net | $ 58,501 | $ 9,290 | $ (1,641) |
Basis of Presentation and Sig_8
Basis of Presentation and Significant Accounting Policies - Schedule of Other Nonoperating Income (Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Accounting Policies [Abstract] | |||
Change in fair value of equity warrants and investments | $ 13,079 | $ (13,340) | $ 0 |
Foreign currency transaction gains | 285 | 174 | 0 |
Change in fair value of equity investments | (10) | 0 | 0 |
Other income (expense), net | $ 13,354 | $ (13,166) | $ 0 |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Purchase Price, Net of Cash Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Nov. 07, 2022 | Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Cash paid for acquisition of business, net of cash acquired | $ 367 | $ 40,033 | $ 0 | |
Petabyte | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 43,281 | |||
Less: cash acquired | 2,881 | |||
Cash paid for acquisition of business, net of cash acquired | $ 40,400 |
Acquisitions - Schedule of Reco
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 | Nov. 07, 2022 |
Assets acquired: | |||
Goodwill | $ 39,442 | $ 39,442 | |
Petabyte | |||
Assets acquired: | |||
Cash and cash equivalents | $ 2,881 | ||
Accounts receivable | 104 | ||
Goodwill | 39,442 | ||
Identified intangible assets | 1,510 | ||
Other current and non-current assets | 318 | ||
Liabilities assumed: | |||
Other current and long-term liabilities | (974) | ||
Purchase price | $ 43,281 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | Jan. 28, 2024 | Jan. 29, 2023 | Nov. 07, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 39,442,000 | $ 39,442,000 | |
Developed technology | |||
Business Acquisition [Line Items] | |||
Useful Life (years) | 3 years | ||
Petabyte | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 39,442,000 | ||
Expected tax deductible amount | 0 | ||
Identified intangible assets | 1,510,000 | ||
Petabyte | Developed technology | |||
Business Acquisition [Line Items] | |||
Identified intangible assets | $ 1,500,000 | ||
Useful Life (years) | 3 years |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) | 12 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||
Accumulated gross unrealized gain (loss) | $ 0 | |
Allowance for credit loss, period increase (decrease) | 0 | |
Allowance for credit loss | 0 | |
Deferred credits | $ 1,900,000 | $ 45,000,000 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other non-current assets | Other non-current assets |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 602,232 | $ 331,641 |
Equity investments | 193 | 18 |
Marketable securities | 531,785 | 346,944 |
Equity warrants | 0 | 0 |
Total financial instruments | 1,134,017 | 678,585 |
Level 1 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury securities | 531,592 | 346,926 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Equity investments | 0 | 0 |
Marketable securities | 0 | 0 |
Equity warrants | 0 | 0 |
Total financial instruments | 0 | 0 |
Level 2 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury securities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Equity investments | 0 | 0 |
Marketable securities | 0 | 0 |
Equity warrants | 2,219 | 31,622 |
Total financial instruments | 2,219 | 31,622 |
Level 3 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury securities | 0 | 0 |
Cash | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 602,232 | 301,641 |
Cash | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Cash | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 30,000 |
Money market funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Money market funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 0 | $ 0 |
Financial Instruments - Summary
Financial Instruments - Summary of Changes in Fair Value of Financial Instruments Using Unobservable Level 3 Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 31,622 | $ 0 |
Equity warrants acquired | 0 | 44,962 |
Change in fair value of equity warrants | $ (29,403) | $ (13,340) |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net |
Ending balance | $ 2,219 | $ 31,622 |
Financial Instruments - Summa_2
Financial Instruments - Summary of Quantitative Information About Level 3 Significant Unobservable Inputs Used in the Fair Value Measurement of the Equity Warrants (Details) - Level 3 - Fair Value, Recurring $ in Thousands | Jan. 28, 2024 USD ($) |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Equity warrants | $ 2,219 |
Minimum | Probability of vesting | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Equity warrants, measurement input | 0 |
Minimum | Equity volatility | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Equity warrants, measurement input | 0.35 |
Maximum | Probability of vesting | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Equity warrants, measurement input | 0.50 |
Maximum | Equity volatility | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Equity warrants, measurement input | 0.85 |
Weighted Average | Probability of vesting | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Equity warrants, measurement input | 0.18 |
Weighted Average | Equity volatility | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Equity warrants, measurement input | 0.77 |
Property and Equipment, net - S
Property and Equipment, net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 827,286 | $ 709,470 |
Less: accumulated depreciation and amortization | 305,988 | 230,585 |
Property and equipment, net | 521,298 | 478,885 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 174,092 | 162,618 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 75,677 | 67,849 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 183,380 | 139,082 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 312,123 | 246,386 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 82,014 | $ 93,535 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 75.6 | $ 57.5 | $ 40.8 |
Internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated depreciation and amortization | 87.5 | 57.4 | |
Amortization expense | $ 30.2 | $ 22.4 | $ 14.2 |
Identified Intangible Assets -
Identified Intangible Assets - Schedule of Intangible Assets (Details) $ in Thousands | Jan. 28, 2024 USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 11,596 |
Accumulated Amortization | (7,633) |
Total intangible asset amortization | $ 3,963 |
Weighted-Average Remaining Life (years) | 1 year |
Developed technology | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 11,596 |
Accumulated Amortization | (7,633) |
Total intangible asset amortization | $ 3,963 |
Weighted-Average Remaining Life (years) | 1 year |
Identified Intangible Assets _2
Identified Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 3.9 | $ 3.5 | $ 0.3 |
Identified Intangible Assets _3
Identified Intangible Assets - Schedule of Future Estimated Amortization of Intangible Assets (Details) $ in Thousands | Jan. 28, 2024 USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2024 | $ 3,585 |
2025 | 378 |
Total intangible asset amortization | $ 3,963 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - patent | Apr. 11, 2022 | Oct. 08, 2021 | Feb. 15, 2021 |
Loss Contingencies [Line Items] | |||
Number of patents allegedly infringed | 5 | ||
Number of patents found not infringed | 3 | 1 | |
Pending litigation | |||
Loss Contingencies [Line Items] | |||
Number of patents allegedly infringed | 4 |
Debt (Details)
Debt (Details) - Line of Credit - Revolving Credit Facility | 12 Months Ended |
Jan. 28, 2024 USD ($) | |
Line of Credit Facility [Line Items] | |
Line of credit facility principal | $ 800,000,000 |
Line of credit facility additional aggregate principal increase limit | $ 250,000,000 |
Minimum fixed charge coverage ratio | 1 |
Excess availability as percent of maximum borrowing amount | 10% |
Excess availability maximum borrowing amount | $ 72,000,000 |
Line of credit facility, current borrowing capacity | 759,000,000 |
Outstanding borrowings | $ 0 |
Minimum | |
Line of Credit Facility [Line Items] | |
Commitment fee percentage | 0.25% |
Base Rate | Minimum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.25% |
Base Rate | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.75% |
SOFR | Minimum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.25% |
SOFR | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.75% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended | ||
Jan. 28, 2024 USD ($) renewalOption | Jan. 29, 2023 USD ($) | Jan. 30, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Assets acquired in exchange for operating lease liability | $ 106.3 | $ 92.1 | |
Lease expense | 104.4 | 90.9 | $ 79.7 |
Short-term and variable lease cost | $ 24.8 | $ 18.9 | 17.7 |
Weighted average remaining lease term | 11 years 9 months 18 days | 12 years | |
Weighted average discount rate | 8.40% | 8.40% | |
Operating lease payments | $ 95.7 | $ 76.8 | $ 67.9 |
Real Estate | |||
Lessee, Lease, Description [Line Items] | |||
Number of renewal options | renewalOption | 3 | ||
Renewal term | 5 years | ||
Minimum | Real Estate | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 5 years | ||
Minimum | Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 3 years | ||
Maximum | Real Estate | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 15 years | ||
Maximum | Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 5 years |
Leases - Schedule of Lease Asse
Leases - Schedule of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 |
Assets | ||
Operating | $ 474,617 | $ 423,518 |
Current | ||
Operating | $ 29,003 | $ 27,646 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Non-current | ||
Operating | $ 527,795 | $ 471,821 |
Total operating lease liabilities | $ 556,798 | $ 499,467 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturity (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 |
Operating Leases | ||
2024 | $ 70,522 | |
2025 | 77,677 | |
2026 | 74,844 | |
2027 | 70,932 | |
2028 | 71,866 | |
Thereafter | 534,553 | |
Total lease payments | 900,394 | |
Less: interest | 343,596 | |
Present value of lease liabilities | $ 556,798 | $ 499,467 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Details) | 12 Months Ended | |||||
Jan. 09, 2024 shares | Apr. 12, 2021 shares | May 11, 2020 shares | May 08, 2020 shares | Jan. 28, 2024 vote | May 16, 2023 shares | |
Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock number of votes per share | vote | 1 | |||||
Conversion of stock, shares converted (in shares) | 12,325,000 | |||||
Class A Common Stock | Buddy Chester Sub LLC | ||||||
Class of Stock [Line Items] | ||||||
Conversion of stock (in shares) | 17,584,098 | |||||
Forward purchase agreement (in shares) | 17,584,098 | |||||
Forward purchase agreement period | 20 days | |||||
Forward purchase agreement, total settlement (in shares) | 17,584,098 | |||||
Class A Common Stock | Argos Intermediate Holdco I Inc. | ||||||
Class of Stock [Line Items] | ||||||
Conversion of stock (in shares) | 6,150,000 | |||||
Class B common stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock number of votes per share | vote | 10 | |||||
Common stock conversion ratio | 1 | |||||
Conversion of stock, shares converted (in shares) | (12,325,000) | |||||
Percentage of outstanding stock | 7.50% | |||||
Class B common stock | Buddy Chester Sub LLC | ||||||
Class of Stock [Line Items] | ||||||
Conversion of stock (in shares) | (17,584,098) | |||||
Class B common stock | Argos Intermediate Holdco I Inc. | ||||||
Class of Stock [Line Items] | ||||||
Conversion of stock (in shares) | (6,150,000) |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | |||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | Jul. 14, 2022 | |
PRSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 13.7 | |||
Unrecognized compensation cost, recognition period | 2 years | |||
Awards vested (in shares) | 1,936 | |||
PRSUs | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vested (in shares) | 100 | 200 | 200 | |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 456.5 | |||
Unrecognized compensation cost, recognition period | 2 years 6 months | |||
Awards vested (in shares) | 4,501 | |||
2022 Plan | Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares allowed for issuance (in shares) | 1,000 | |||
2022 Plan | Class A Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for future issuance (in shares) | 26,000 | |||
2022 Plan | Class A Common Stock | Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares allowed for issuance (in shares) | 40,000 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Service and Performance Based-Awards Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
PRSUs | |||
Number of PRSUs/ RSUs | |||
Beginning balance (in shares) | 2,206 | ||
Granted (in shares) | 500 | ||
Vested (in shares) | (1,936) | ||
Forfeited (in shares) | (217) | ||
Ending balance (in shares) | 553 | 2,206 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 36.22 | ||
Granted (in dollars per share) | 26.91 | $ 43.59 | $ 80.85 |
Vested (in dollars per share) | 35.89 | ||
Forfeited (in dollars per share) | 37.38 | ||
Ending balance (in dollars per share) | $ 28.49 | $ 36.22 | |
RSUs | |||
Number of PRSUs/ RSUs | |||
Beginning balance (in shares) | 10,813 | ||
Granted (in shares) | 14,228 | ||
Vested (in shares) | (4,501) | ||
Forfeited (in shares) | (3,152) | ||
Ending balance (in shares) | 17,388 | 10,813 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 45.56 | ||
Granted (in dollars per share) | 31 | $ 41.54 | $ 72.05 |
Vested (in dollars per share) | 45.61 | ||
Forfeited (in dollars per share) | 39.94 | ||
Ending balance (in dollars per share) | $ 34.65 | $ 45.56 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Weighted Average Grant-Date Fair Value and Total Fair Value of Service and Performance Based-Awards Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
PRSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value (in dollars per share) | $ 26.91 | $ 43.59 | $ 80.85 |
Total fair value of vested | $ 74.8 | $ 145.5 | $ 318.2 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value (in dollars per share) | $ 31 | $ 41.54 | $ 72.05 |
Total fair value of vested | $ 154.6 | $ 47.6 | $ 19.5 |
Share-Based Compensation - Sc_2
Share-Based Compensation - Schedule of Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 239,107 | $ 158,122 | $ 77,772 |
PRSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 1,896 | 12,710 | 27,423 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 237,211 | $ 145,412 | $ 50,349 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Tax Credit Carryforward [Line Items] | |||
Current income tax provision | $ 8,700,000 | $ 2,600,000 | $ 0 |
Deferred income tax provision | 0 | ||
Increase in valuation allowance | 50,400,000 | ||
Capitalized research expenditures | 122,600,000 | 36,535,000 | |
Total loss carryforwards | 130,382,000 | 177,627,000 | |
Tax credit carryforward | 52,166,000 | ||
Unrecognized tax benefits, interest on income taxes accrued | 1,400,000 | ||
Payments for tax sharing agreement with related parties | 10,279,000 | 2,828,000 | (43,714,000) |
Payable for tax sharing agreement | 5,300,000 | ||
Income tax liabilities, indemnified | 1,900,000,000 | ||
Income taxes paid | 1,799,758,000 | $ 0 | $ 0 |
Accrued Income Taxes | 4,400,000 | ||
Current Year Activity | |||
Tax Credit Carryforward [Line Items] | |||
Increase in valuation allowance | 44,600,000 | ||
Federal Tax Credits | |||
Tax Credit Carryforward [Line Items] | |||
Increase in valuation allowance | 4,600,000 | ||
Other Adjustments | |||
Tax Credit Carryforward [Line Items] | |||
Increase in valuation allowance | 1,200,000 | ||
Indemnification Agreement | |||
Tax Credit Carryforward [Line Items] | |||
Guarantor obligations | 19,700,000 | ||
Related Party | |||
Tax Credit Carryforward [Line Items] | |||
Income taxes paid | 1,800,000,000 | ||
Accrued Income Taxes | 108,900,000 | ||
Nonrelated Party | |||
Tax Credit Carryforward [Line Items] | |||
Income taxes paid | 5,000,000 | ||
Definitive expiration dates | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | 210,600,000 | ||
No expiration | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | 277,500,000 | ||
Federal | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | 492,700,000 | ||
State Tax Authority | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | 488,100,000 | ||
Foreign Tax Authority | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 20,400,000 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21% | 21% | 21% |
Foreign earnings, net of taxes | 2.80% | 0% | 0% |
State income taxes, net of federal tax benefit | (4.10%) | 3.80% | 10.90% |
Change in tax rate | 0% | 2.50% | (0.20%) |
Share-based compensation and other nondeductible expenses | 16.80% | (24.40%) | 73% |
Tax credits | (43.70%) | (22.20%) | 36.10% |
Other | 0.90% | 3.30% | (0.10%) |
Change in valuation allowance | 24.20% | 21% | (140.70%) |
Effective rate | 17.90% | 5% | 0% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | Jan. 31, 2021 |
Deferred tax assets: | ||||
Operating lease liabilities | $ 144,965 | $ 129,786 | ||
Inventories | 13,313 | 10,897 | ||
Share-based compensation | 32,029 | 37,085 | ||
Accrued expenses and reserves | 16,495 | 13,468 | ||
Net operating loss carryforwards | 130,382 | 177,627 | ||
Tax credit carryforwards | 52,166 | 40,391 | ||
Capitalized research expenditures | 122,600 | 36,535 | ||
Other | 3,248 | 7,971 | ||
Total deferred tax assets | 515,198 | 453,760 | ||
Less: valuation allowance | 281,119 | 230,692 | $ 217,032 | $ 124,012 |
Deferred tax assets, net of valuation allowance | 234,079 | 223,068 | ||
Deferred tax liabilities: | ||||
Operating lease right-of-use assets | 123,563 | 109,827 | ||
Depreciation | 101,235 | 107,014 | ||
Prepaids | 7,289 | 6,227 | ||
Other | 1,992 | 0 | ||
Total deferred tax liabilities | 234,079 | 223,068 | ||
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowance, as of beginning of period | $ 230,692 | $ 217,032 | $ 124,012 |
Valuation allowances established | 50,434 | 14,970 | 93,199 |
Changes to existing valuation allowances | (7) | (1,310) | (179) |
Valuation allowance, as of end of period | $ 281,119 | $ 230,692 | $ 217,032 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Jan. 29, 2023 |
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards, indefinite | $ 114,724 | |
Total loss carryforwards | 130,382 | $ 177,627 |
2024 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards, subject to expiration | 91 | |
2025 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards, subject to expiration | 3 | |
2026 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards, subject to expiration | 64 | |
2032 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards, subject to expiration | 13 | |
2033 | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards, subject to expiration | 128 | |
Thereafter | ||
Operating Loss Carryforwards [Line Items] | ||
Total loss carryforwards, subject to expiration | $ 15,359 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) $ in Thousands | Jan. 28, 2024 USD ($) |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $ 52,166 |
Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 47,987 |
Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 3,655 |
Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 524 |
2025 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 128 |
2025 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2025 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2025 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 128 |
2026 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 273 |
2026 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 90 |
2026 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2026 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 183 |
2027 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 430 |
2027 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 217 |
2027 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2027 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 213 |
2038 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 17 |
2038 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 17 |
2038 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2038 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2040 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 417 |
2040 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2040 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 417 |
2040 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2041 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 8,917 |
2041 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 7,775 |
2041 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 1,142 |
2041 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2042 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 18,363 |
2042 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 16,267 |
2042 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 2,096 |
2042 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2043 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 23,621 |
2043 | Research and Development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 23,621 |
2043 | Work Opportunity | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 0 |
2043 | Quality Jobs Tax Credit | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $ 0 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 0 | $ 0 | $ 0 |
Additions due to parent reorganization transaction | 18,298 | 0 | 0 |
Ending balance | $ 18,298 | $ 0 | $ 0 |
Earnings (Loss) per Share (Deta
Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Jan. 30, 2022 | |
Numerator | |||
Earnings (loss) attributable to common Class A and Class B stockholders | $ 39,580 | $ 49,899 | $ (75,207) |
Weighted-average common shares used in computing earnings (loss) per share: | |||
Basic (in shares) | 429,457 | 422,331 | 417,218 |
Effect of dilutive share-based awards (in shares) | 2,583 | 5,439 | 0 |
Diluted (in shares) | 432,040 | 427,770 | 417,218 |
Anti-dilutive stock-based awards excluded from diluted common shares (in shares) | 11,058 | 5,377 | 9,773 |
Earnings (loss) per share attributable to common Class A and Class B stockholders: | |||
Basic (in dollars per share) | $ 0.09 | $ 0.12 | $ (0.18) |
Diluted (in dollars per share) | $ 0.09 | $ 0.12 | $ (0.18) |
Certain Relationships and Rel_2
Certain Relationships and Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Related Party Transaction [Line Items] | ||
Noncash settlement with related parties | $ 54,734,000 | |
Related Party | ||
Related Party Transaction [Line Items] | ||
Accounts payable, current | 0 | $ 60,300,000 |
BC Partners | Related Party | ||
Related Party Transaction [Line Items] | ||
Other receivables, current | 48,300,000 | |
PetSmart | Related Party | ||
Related Party Transaction [Line Items] | ||
Other receivables, current | $ 0 |