Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 03, 2019 | Mar. 31, 2019 | Jul. 29, 2018 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 3, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | WILLIAMS SONOMA INC | ||
Entity Central Index Key | 0000719955 | ||
Current Fiscal Year End Date | --02-03 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 4,678,185,000 | ||
Trading Symbol | WSM | ||
Entity Common Stock, Shares Outstanding | 78,563,968 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |||||
Net revenues | [1] | $ 5,671,593 | $ 5,292,359 | $ 5,083,812 | |||
Cost of goods sold | 3,570,580 | 3,360,648 | 3,200,502 | ||||
Gross profit | 2,101,013 | 1,931,711 | 1,883,310 | ||||
Selling, general and administrative expenses | 1,665,060 | 1,477,900 | 1,410,711 | ||||
Operating income | 435,953 | [2] | 453,811 | [3] | 472,599 | [3] | |
Interest (income) expense, net | 6,706 | 1,372 | 688 | ||||
Earnings before income taxes | 429,247 | 452,439 | 471,911 | ||||
Income taxes | 95,563 | 192,894 | 166,524 | ||||
Net earnings | $ 333,684 | $ 259,545 | $ 305,387 | ||||
Basic earnings per share | $ 4.10 | $ 3.03 | $ 3.45 | ||||
Diluted earnings per share | $ 4.05 | $ 3.02 | $ 3.41 | ||||
Shares used in calculation of earnings per share: | |||||||
Basic | 81,420 | 85,592 | 88,594 | ||||
Diluted | 82,340 | 86,080 | 89,462 | ||||
E-commerce | |||||||
Net revenues | $ 3,082,064 | $ 2,778,457 | $ 2,633,602 | ||||
Retail | |||||||
Net revenues | $ 2,589,529 | $ 2,513,902 | $ 2,450,210 | ||||
[1] | Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $346.8 million, $328.2 million and $321.2 million in fiscal 2018, fiscal 2017 and fiscal 2016 respectfully. | ||||||
[2] | The 53 weeks ended February 3, 2019 includes approximately $25.2 million of expense related to our acquisition of Outward (primarily acquisition-related compensation costs, the amortization of intangible assets acquired, and the operations of the Outward business), of which $19.6 million is recorded in the e-commerce segment and $5.5 million is recorded in the unallocated segment; $13.2 million of expense related to impairment and early lease termination charges which is primarily recorded in the retail segment; and $8.0 million of employment-related expense primarily associated with an equity grant, which is recorded within the unallocated segment. | ||||||
[3] | The 52 weeks ended January 28, 2018 includes approximately $8.6 million for severance-related charges, primarily in our corporate functions, which is recorded within the unallocated segment and approximately $6.2 million for costs related to the acquisition of Outward and its ongoing operations, of which $3.3 million is recorded in the e-commerce segment and $2.9 million is recorded in the unallocated segment. The 52 weeks ended January 29, 2017 includes $14.4 million for severance-related reorganization charges, primarily in our corporate functions, which is recorded within the unallocated segment. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Net earnings | $ 333,684 | $ 259,545 | $ 305,387 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (5,032) | 3,730 | 1,523 |
Change in fair value of derivative financial instruments, net of tax (tax benefit) of $390, $(259) and $(327) | 1,098 | (715) | (916) |
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax (tax benefit) of $122, $(38) and $(41) | (357) | 106 | 106 |
Comprehensive income | $ 329,393 | $ 262,666 | $ 306,100 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Change in fair value of derivative financial instruments, tax | $ 390 | $ (259) | $ (327) |
Reclassification adjustment for realized losses on derivative financial instruments, tax | $ 122 | $ (38) | $ (41) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 03, 2019 | Jan. 28, 2018 | |
Current assets | |||
Cash and cash equivalents | $ 338,954 | $ 390,136 | |
Accounts receivable, net | 107,102 | 90,119 | |
Merchandise inventories, net | 1,124,992 | 1,061,593 | |
Prepaid catalog expenses | 0 | 20,517 | |
Prepaid expenses | 101,356 | 62,204 | |
Other current assets | 21,939 | 11,876 | |
Total current assets | 1,694,343 | 1,636,445 | |
Property and equipment, net | 929,635 | 932,283 | |
Deferred income taxes, net | 44,055 | 67,306 | |
Goodwill | 85,382 | 18,838 | |
Other long-term assets, net | 59,429 | 130,877 | |
Total assets | [1] | 2,812,844 | 2,785,749 |
Current liabilities | |||
Accounts payable | 526,702 | 457,144 | |
Accrued expenses | 163,559 | 134,207 | |
Gift card and other deferred revenue | 290,445 | 300,607 | |
Income taxes payable | 21,461 | 56,783 | |
Other current liabilities | 72,645 | 59,082 | |
Total current liabilities | 1,074,812 | 1,007,823 | |
Deferred rent and lease incentives | 201,374 | 202,134 | |
Long-term debt | 299,620 | 299,422 | |
Other long-term liabilities | 81,324 | 72,804 | |
Total liabilities | 1,657,130 | 1,582,183 | |
Commitments and contingencies – See Note I | |||
Stockholders' equity | |||
Preferred stock: $.01 par value; 7,500 shares authorized; none issued | |||
Common stock: $.01 par value; 253,125 shares authorized; 78,813 and 83,726 shares issued and outstanding at February 3, 2019 and January 28, 2018, respectively | 789 | 837 | |
Additional paid-in capital | 581,900 | 562,814 | |
Retained earnings | 584,333 | 647,422 | |
Accumulated other comprehensive loss | (11,073) | (6,782) | |
Treasury stock – at cost: 2 and 11 shares as of February 3, 2019 and January 28, 2018, respectively | (235) | (725) | |
Total stockholders' equity | 1,155,714 | 1,203,566 | |
Total liabilities and stockholders' equity | $ 2,812,844 | $ 2,785,749 | |
[1] | Includes long-term assets related to our international operations of approximately $50.3 million, $63.4 million and $59.2 million in fiscal 2018, fiscal 2017 and fiscal 2016. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 03, 2019 | Jan. 28, 2018 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 7,500,000 | 7,500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 253,125,000 | 253,125,000 |
Common stock, shares issued | 78,813,000 | 83,726,000 |
Common stock, shares outstanding | 78,813,000 | 83,726,000 |
Treasury stock, shares | 2,000 | 11,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | ||
Beginning Balance (in shares) at Jan. 31, 2016 | 89,563,000 | |||||||
Beginning Balance at Jan. 31, 2016 | $ 1,198,226 | $ 896 | $ 541,307 | $ 668,545 | $ (10,616) | $ (1,906) | ||
Net earnings | 305,387 | 305,387 | ||||||
Foreign currency translation adjustments | 1,523 | 1,523 | ||||||
Change in fair value of derivative financial instruments, net of tax | (916) | (916) | ||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | 106 | 106 | [1] | |||||
Exercise of stock-based awards and related tax effect, shares | 39,000 | |||||||
Exercise of stock-based awards and related tax effect, value | 4,762 | 4,762 | ||||||
Conversion/release of stock-based awards, shares | [2] | 594,000 | ||||||
Conversion/release of stock-based awards, value | [2] | (27,062) | $ 6 | (26,805) | (263) | |||
Repurchases of common stock, shares | (2,871,000) | |||||||
Repurchases of common stock, value | (151,272) | $ (29) | (12,684) | (138,559) | ||||
Reissuance of treasury stock under stock-based compensation plans | [2] | (706) | (83) | 789 | ||||
Stock-based compensation expense | 51,054 | 51,054 | ||||||
Dividends declared | (133,588) | (133,588) | ||||||
Ending Balance (in shares) at Jan. 29, 2017 | 87,325,000 | |||||||
Ending Balance at Jan. 29, 2017 | 1,248,220 | $ 873 | 556,928 | 701,702 | (9,903) | (1,380) | ||
Net earnings | 259,545 | 259,545 | ||||||
Foreign currency translation adjustments | 3,730 | 3,730 | ||||||
Change in fair value of derivative financial instruments, net of tax | (715) | (715) | ||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | 106 | 106 | [1] | |||||
Conversion/release of stock-based awards, shares | [2] | 452,000 | ||||||
Conversion/release of stock-based awards, value | [2] | (18,130) | $ 5 | (17,810) | (325) | |||
Repurchases of common stock, shares | (4,051,000) | |||||||
Repurchases of common stock, value | (196,179) | $ (41) | (18,518) | (177,620) | ||||
Reissuance of treasury stock under stock-based compensation plans | [2] | (554) | (426) | 980 | ||||
Stock-based compensation expense | 42,768 | 42,768 | ||||||
Dividends declared | (135,779) | (135,779) | ||||||
Ending Balance (in shares) at Jan. 28, 2018 | 83,726,000 | |||||||
Ending Balance at Jan. 28, 2018 | 1,203,566 | $ 837 | 562,814 | 647,422 | (6,782) | (725) | ||
Net earnings | 333,684 | 0 | 0 | 333,684 | 0 | 0 | ||
Foreign currency translation adjustments | (5,032) | 0 | 0 | 0 | (5,032) | 0 | ||
Change in fair value of derivative financial instruments, net of tax | 1,098 | 0 | 0 | 0 | 1,098 | 0 | ||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | (357) | $ 0 | 0 | 0 | (357) | [1] | 0 | |
Conversion/release of stock-based awards, shares | [2] | 460,000 | ||||||
Conversion/release of stock-based awards, value | [2] | (14,435) | $ 5 | (14,149) | (291) | |||
Repurchases of common stock, shares | (5,373,000) | |||||||
Repurchases of common stock, value | (295,304) | $ (53) | (25,775) | (269,476) | 0 | 0 | ||
Reissuance of treasury stock under stock-based compensation plans | [2] | 0 | 0 | (418) | (363) | 0 | 781 | |
Stock-based compensation expense | 59,428 | $ 0 | 59,428 | 0 | 0 | 0 | ||
Dividends declared | (144,609) | 0 | (144,609) | 0 | 0 | |||
Adoption of accounting pronouncements | [3] | 17,675 | 17,675 | |||||
Ending Balance (in shares) at Feb. 03, 2019 | 78,813,000 | |||||||
Ending Balance at Feb. 03, 2019 | $ 1,155,714 | $ 789 | $ 581,900 | $ 584,333 | $ (11,073) | $ (235) | ||
[1] | Refer to Note L for additional disclosures about reclassifications out of accumulated other comprehensive income and their corresponding effects on the respective line items in the Consolidated Statements of Earnings. | |||||||
[2] | Amounts are shown net of shares withheld for employee taxes. | |||||||
[3] | Primarily relates to our adoption of ASU 2014-09 in fiscal 2018. See Note A. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Cash flows from operating activities: | |||
Net earnings | $ 333,684 | $ 259,545 | $ 305,387 |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 188,808 | 183,077 | 173,195 |
Loss on disposal/impairment of assets | 10,209 | 1,889 | 3,806 |
Amortization of deferred lease incentives | (26,199) | (25,372) | (25,212) |
Deferred income taxes | 23,639 | 63,381 | 7,114 |
Tax benefit related to stock-based awards | 0 | 3,230 | |
Excess tax benefit related to stock-based awards | 0 | (4,894) | |
Stock-based compensation expense | 59,802 | 42,988 | 51,116 |
Other | (579) | (135) | (423) |
Changes in: | |||
Accounts receivable | (15,329) | 149 | (9,794) |
Merchandise inventories | (70,331) | (80,235) | 4,493 |
Prepaid catalog expenses | 0 | (1,019) | 6,448 |
Prepaid expenses and other assets | (54,691) | (15,475) | (7,521) |
Accounts payable | 62,377 | 2,549 | 4,276 |
Accrued expenses and other liabilities | 45,976 | 9,597 | 19,712 |
Gift card and other deferred revenue | 38,899 | (3,002) | 2,020 |
Deferred rent and lease incentives | 24,929 | 28,226 | 35,559 |
Income taxes payable | (35,208) | 33,541 | (43,803) |
Net cash provided by operating activities | 585,986 | 499,704 | 524,709 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (190,102) | (189,712) | (197,414) |
Acquisition of Outward, Inc., net of cash received | 0 | (80,528) | |
Other | 2,203 | 480 | 439 |
Net cash used in investing activities | (187,899) | (269,760) | (196,975) |
Cash flows from financing activities: | |||
Repurchases of common stock | (295,304) | (196,179) | (151,272) |
Payment of dividends | (140,325) | (135,010) | (133,539) |
Borrowings under revolving line of credit | 60,000 | 170,000 | 125,000 |
Repayments of borrowings under revolving line of credit | (60,000) | (170,000) | (125,000) |
Tax withholdings related to stock-based awards | (14,437) | (18,130) | (27,062) |
Proceeds from issuance of long-term debt | 0 | 300,000 | |
Excess tax benefit related to stock-based awards | 0 | 4,894 | |
Proceeds related to stock-based awards | 0 | 0 | 1,532 |
Debt issuance costs | 0 | (1,191) | (359) |
Other | 0 | (1,197) | |
Net cash used in financing activities | (450,066) | (51,707) | (305,806) |
Effect of exchange rates on cash and cash equivalents | 797 | (1,814) | (1,862) |
Net increase (decrease) in cash and cash equivalents | (51,182) | 176,423 | 20,066 |
Cash and cash equivalents at beginning of year | 390,136 | 213,713 | 193,647 |
Cash and cash equivalents at end of year | 338,954 | 390,136 | 213,713 |
Supplemental disclosure of cash flow information: | |||
Cash paid during the year for interest | 11,424 | 2,915 | 2,202 |
Cash paid during the year for income taxes, net of refunds | 107,951 | 99,062 | 203,426 |
Non-cash investing activities: | |||
Purchases of property and equipment not yet paid for at end of year | $ 2,773 | $ 1,257 | $ 625 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 03, 2019 | |
Summary of Significant Accounting Policies | Note A: Summary of Significant Accounting Policies We are a specialty retailer of high-quality products for the home. These products, representing distinct merchandise strategies — Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams Sonoma Home, Rejuvenation, and Mark and Graham — are marketed through e-commerce websites, direct-mail catalogs and 625 Reclassifications Certain amounts reported in our Consolidated Balance Sheet as of January 28, 2018 and our Consolidated Statements of Cash Flows for the fifty-two weeks ended January 28, 2018 and January 29, 2017 have been reclassified in order to conform to the current period presentation. These reclassifications impacted prepaid catalog expenses, prepaid expenses, goodwill, other long-term assets, accounts payable, accrued expenses, gift card and other deferred revenue and other current liabilities. There was no change to total current assets, total assets, total current liabilities, or cash flows as a result of these reclassifications. Consolidation The Consolidated Financial Statements include the accounts of Williams-Sonoma, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated. Fiscal Year Our fiscal year ends on the Sunday closest to January 31, based on a 52 or 53-week year. Fiscal 2018, a 53-week year, ended on February 3, 2019; Fiscal 2017, a 52-week year, ended on January 28, 2018; and Fiscal 2016, a 52-week year, ended on January 29, 2017. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. These estimates and assumptions are evaluated on an ongoing basis and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ from these estimates. Cash Equivalents Cash equivalents include highly liquid investments with an original maturity of three months or less. As of February 3, 2019, we were invested primarily in interest-bearing demand deposit accounts and money market funds. Book cash overdrafts issued, but not yet presented to the bank for payment, are reclassified to accounts payable. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at their carrying values, net of an allowance for doubtful accounts. Accounts receivable consist primarily of credit card, franchisee and landlord receivables for which collectability is reasonably assured. Receivables are evaluated for collectability on a regular basis and an allowance for doubtful accounts is recorded, if necessary. Our allowance for doubtful accounts was not material to our financial statements as of February 3, 2019 and January 28, 2018. Merchandise Inventories Merchandise inventories, net of an allowance for shrinkage and obsolescence, are stated at the lower of cost (weighted average method) or market. To determine if the value of our inventory should be reduced below cost, we consider current and anticipated demand, customer preferences and age of the merchandise. The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage. We reserve for obsolescence based on historical trends, aging reports, specific identification and our estimates of future sales and selling prices. Reserves for shrinkage are estimated and recorded throughout the year as a percentage of net sales based on historical shrinkage results, cycle count results within our distribution centers, expectations of future shrinkage and current inventory levels. Actual shrinkage is recorded at year-end based on the results of our physical inventory counts and can vary from our estimates due to such factors as changes in operations, the mix of our inventory (which ranges from large furniture to small tabletop items) and execution against loss prevention initiatives in our stores, distribution facilities, off-site storage locations, and with our third-party warehouse and transportation providers. Accordingly, there is no shrinkage reserve at year-end, with the exception of a cycle count reserve based on the historical cycle count results in our distribution centers. This reserve was not material to our Consolidated Financial Statements as of February 3, 2019. Historically, actual shrinkage has not differed materially from our estimates. Our obsolescence and shrinkage reserve calculations contain estimates that require management to make assumptions and to apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. If actual obsolescence or shrinkage estimates change from our original estimate, we will adjust our reserves accordingly throughout the year. We have made no material changes to our assumptions included in the calculations of the obsolescence and shrinkage reserves throughout the year. As of February 3, 2019, and January 28, 2018, our inventory obsolescence reserves were $13,580,000 and $12,649,000, respectively. Property and Equipment Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives of the assets: Leasehold improvements Shorter of estimated useful life or lease term (generally 5 – 22 years) Fixtures and equipment 2 – 20 years Buildings and building improvements 10 – 40 years Capitalized software 2 – 10 years We review the carrying value of all long-lived assets for impairment, primarily at an individual store level, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Our impairment analyses determine whether projected cash flows from operations are sufficient to recover the carrying value of these assets. Impairment may result when the carrying value of the asset exceeds the estimated undiscounted future cash flows over its remaining useful life. For store impairment, our estimate of undiscounted future cash flows over the store lease term is based upon our experience, the historical operations of the stores and estimates of future store profitability and economic conditions. The estimates of future store profitability and economic conditions require estimating such factors as sales growth, gross margin, employment costs, lease escalations, inflation and the overall economics of the retail industry, and are therefore subject to variability and difficult to predict. Actual future results may differ from those estimates. If a long-lived asset is found to be impaired, the amount recognized for impairment is equal to the excess of the asset’s net carrying value over its fair value. Long-lived assets are measured at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy (see Note M). The fair value is based on the present value of estimated future cash flows using a discount rate that approximates our weighted average cost of capital. During fiscal 2018, we recorded asset impairment charges of approximately $9,639,000, related to our retail stores, which is recorded within selling, general and administrative expenses. During fiscal 2017, we did not record any asset impairment charges. During fiscal 2016, we recorded asset impairment charges of approximately $1,765,000, related to our retail stores. Goodwill Goodwill is initially recorded as of the acquisition date, and is measured as any excess of the purchase price over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized, but rather is subject to impairment testing annually (on the first day of the fourth quarter), or between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. We first perform a qualitative assessment to evaluate goodwill for potential impairment. If based on that assessment it is more likely than not that the fair value of the reporting unit is below its carrying value, a quantitative impairment test is necessary. The quantitative impairment test requires determining the fair value of the reporting unit. We use the income approach, whereby we calculate the fair value based on the present value of estimated future cash flows using a discount rate that approximates our weighted average cost of capital. The process of evaluating the potential impairment of goodwill is subjective and requires significant estimates and assumptions about the future such as sales growth, gross margins, employment costs, capital expenditures, inflation and future economic and market conditions. Actual future results may differ from those estimates. If the carrying value of the reporting unit’s assets and liabilities, including goodwill, exceeds its fair value, impairment is recorded for the excess, not to exceed the total amount of goodwill allocated to the reporting unit. As of February 3, 2019 and January 28, 2018, we had goodwill of $85,382,000 and $18,838,000, Self-Insured Liabilities We are primarily self-insured for workers’ compensation, employee health benefits, product and other general liability claims. We record self-insurance liability reserves based on claims filed, including the development of those claims, and an estimate of claims incurred but not yet reported, based on an actuarial analysis of historical claims data. Factors affecting these estimates include future inflation rates, changes in severity, benefit level changes, medical costs and claim settlement patterns. Should a different number of claims occur compared to what was estimated, or costs of the claims increase or decrease beyond what was anticipated, reserves may need to be adjusted accordingly. Self-insurance reserves for workers’ compensation, employee health benefits, product and other general liability claims were $28,542,000 and $26,370,000 as of February 3, 2019 and January 28, 2018, respectively. Deferred Rent and Lease Incentives For leases that contain fixed escalations of the minimum annual lease payment during the original term of the lease, we recognize rent expense on a straight-line basis over the lease term, including the construction period, and record the difference between rent expense and the amount currently payable as deferred rent. Deferred lease incentives include construction allowances received from landlords, which are amortized on a straight-line basis over the lease term, including the construction period. For any store or facility closure where a lease obligation still exists, we record the estimated future liability associated with the rental obligation on the cease use date. Fair Value of Financial Instruments The carrying values of cash and cash equivalents, accounts receivable, accounts payable and debt approximate their estimated fair values. We use derivative financial instruments to hedge against foreign currency exchange rate fluctuations. The assets or liabilities associated with our derivative financial instruments are recorded at fair value in either other current or long-term assets or other current or long-term liabilities. The fair value of our foreign currency derivative instruments is measured using the income approach whereby we use observable market data at the measurement date and standard valuation techniques to convert future amounts to a single present value amount. These observable inputs include spot rates, forward rates, interest rates and credit derivative market rates (see Notes L and M for additional information). Merchandise Sales Revenues from the sale of our merchandise through our e-commerce channel, at our retail stores, as well as to our franchisees and wholesale customers are, in each case, recognized at a point in time when control of merchandise is transferred to the customer. Merchandise can either be picked up in our stores, or delivered to the customer. For merchandise picked up in the store, control is transferred at the time of the sale to the customer. For merchandise delivered to the customer, control is transferred either when delivery has been completed, or when we have a present right to payment which, for certain merchandise, occurs upon conveyance of the merchandise to the carrier for delivery. We exclude from revenue any taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and are concurrent with revenue-generating activities. Our payment terms are primarily at the point of sale for merchandise sales and for most services. We have elected to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. Revenue from the sale of merchandise is reported net of sales returns. We estimate future returns based on historical return trends together with current product sales performance. As of February 3, 2019, we recorded a liability for expected sales returns of approximately $26,276,000 within other current liabilities and a corresponding asset for the expected net realizable value of the merchandise inventory to be returned of approximately $10,030,000 within other current assets in our Consolidated Balance Sheet. Prior to the adoption of Auditing Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Gift Card and Other Deferred Revenue We defer revenue when cash payments are received in advance of satisfying performance obligations, primarily associated with our stored-value cards, merchandise sales, customer loyalty programs, and incentives received from credit card issuers. We issue stored-value cards that may be redeemed on future merchandise purchases at our stores or through our e-commerce channel. Our stored-value cards have no expiration dates. Revenue from stored-value cards is recognized at a point in time upon redemption of the card and as control of the merchandise is transferred to the customer. Revenue from estimated unredeemed stored-value cards (breakage) is recognized in a manner consistent with our historical redemption patterns over the estimated period of redemption of our cards of approximately four years, the majority of which is recognized within one year of the card issuance. Breakage revenue is not material to our Consolidated Financial Statements. For merchandise sales, we record a liability at each period end where we have not fulfilled our obligation to transfer goods or services to the customer, but for which we have already received consideration or have a right to consideration. We have customer loyalty programs which allow members to earn points for each qualifying purchase. Points earned enable members to receive certificates that may be redeemed on future merchandise purchases at our stores or through our e-commerce channel. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The allocated consideration for the points earned by our loyalty program members is deferred based on the standalone selling price of the points and recorded within gift card and other deferred revenue within our Consolidated Balance Sheet. The measurement of standalone selling prices takes into consideration the discount the customer would receive in a separate transaction for the delivered item, as well as our estimate of certificates expected to be redeemed, based on historical redemption patterns. This measurement is applied to our portfolio of performance obligations for points earned, as all obligations have similar economic characteristics. We believe the impact to our Consolidated Financial Statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations relate to contracts with terms less than one year, as our certificates generally expire within 6 months from issuance. We enter into agreements with credit card issuers in connection with our private label and co-branded credit cards whereby we receive cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. Services promised under these agreements are interrelated and are thus considered a single performance obligation. Revenue is recognized over time as we transfer promised services throughout the contract term. As of February 3, 2019, we had recorded $298,435,000 for gift card and other deferred revenue in our Consolidated Balance Sheet, substantially all of which will be recognized into revenue within the next 12 months. Vendor Allowances We receive allowances or credits from certain vendors for volume rebates. We treat such volume rebates as an offset to the cost of the product or services provided at the time the expense is recorded. These allowances and credits received are recorded in both cost of goods sold and in selling, general and administrative expenses. Cost of Goods Sold Cost of goods sold includes cost of goods, occupancy expenses and shipping costs. Cost of goods consists of cost of merchandise, inbound freight expenses, freight-to-store expenses and other inventory-related costs such as shrinkage, damages and replacements. Occupancy expenses consist of rent, depreciation and other occupancy costs, including common area maintenance, property taxes and utilities. Shipping costs consist of third-party delivery services and shipping materials. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of non-occupancy-related costs associated with our retail stores, distribution facilities, customer care centers, supply chain operations (buying, receiving and inspection) and corporate administrative functions. These costs include employment, advertising, third-party credit card processing and other general expenses. Stock-Based Compensation We account for stock-based compensation arrangements by measuring and recognizing compensation expense for all stock-based awards using a fair value based method. Restricted stock units are valued using the closing price of our stock on the date prior to the date of grant. The fair value of each stock-based award is amortized over the requisite service period. Advertising Expenses Advertising expenses consist of media and production costs related to digital advertising, catalog mailings and other direct marketing activities. All advertising costs are expensed as incurred, or upon the release of the initial advertisement. Prior to the adoption of ASU 2014-09 in fiscal 2018, prepaid advertising costs were capitalized and amortized over their expected period of future benefit of approximately three months. Total advertising expenses (including digital advertising, catalog advertising and other advertising costs) were approximately $390,115,000, $382,206,000 and $347,474,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively. Foreign Currency Translation Some of our foreign operations have a functional currency other than the U.S. dollar. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the average exchange rates during the period. The resulting translation adjustments are recorded as other comprehensive income within stockholders’ equity. Foreign currency exchange gains and losses are recorded in selling, general and administrative expenses, except for those discussed in Note L. Earnings Per Share Basic earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding plus common stock equivalents for the period. Common stock equivalents consist of shares subject to stock-based awards with exercise prices less than or equal to the average market price of our common stock for the period, to the extent their inclusion would be dilutive. Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in our Consolidated Financial Statements. We record reserves for our estimates of the additional income tax liability that is more likely than not to result from the ultimate resolution of foreign and domestic tax examinations. At any one time, many tax years are subject to examination by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. We review and update the estimates used in the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, upon completion of tax examination, upon expiration of statutes of limitation, or upon occurrence of other events. In order to compute income tax on an interim basis, we estimate what our effective tax rate will be for the full fiscal year and adjust these estimates throughout the year as necessary. Adjustments to our income tax provision, due to changes in our estimated effective tax rate, are recorded in the interim period in which the change occurs. The tax expense (or benefit) related to items other than ordinary income is individually computed and recognized when the items occur. Our effective tax rate in a given financial statement period may be materially impacted by changes in the mix and level of our earnings in various taxing jurisdictions or changes in tax law. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers • the reclassification from selling, general and administrative expenses into net revenues for certain incentives received from credit card issuers, • the reclassification of breakage income related to our unredeemed stored-value cards from selling, general and administrative expenses into net revenues, as well as the acceleration in the timing of recognizing breakage income, • the acceleration in the timing of revenue recognition for certain merchandise shipped to our customers, and • the recording of a right of return asset for merchandise we expect to receive back from customers. In addition, prepaid catalog advertising costs, which were capitalized and amortized over their expected period of future benefit prior to adoption, and are now expensed as incurred. Prior period balances were not retrospectively adjusted as a result of adopting the ASU. The following summarizes the impact of adopting ASU 2014-09 on our Consolidated Statement of Earnings for the fiscal year ended February 3, 2019: In thousands As Reported ASU 2014-09 Adjustment As Adjusted Net revenue $ 5,671,593 $ (61,106 ) $ 5,610,487 Cost of goods sold 3,570,580 (6,059 ) 3,564,521 Gross profit 2,101,013 (55,047 ) 2,045,966 Selling, general and administrative expenses 1,665,060 (48,766 ) 1,616,294 Operating income $ 435,953 $ (6,281 ) $ 429,672 Other than the presentation of our sales returns liability and a right of return asset, which resulted in a reclassification of liabilities into other current assets, all other impacts to our Consolidated Balance Sheet from the adoption of this ASU were not material either individually or in the aggregate as of February 3, 2019. The adoption of this ASU had no net impact to our Consolidated Statement of Cash Flows for the fiscal year ended February 3, 2019. In Leases, In Intra-Entity Transfers of Assets Other than Inventory. In , Simplifying the Test for Goodwill Impairment, In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic 815), which expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The guidance also makes certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. This ASU is effective for us in the first quarter of fiscal 2019. Entities should apply the guidance to existing cash flow and net investment hedge relationships using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings on the date of adoption. The guidance also provides transition relief to make it easier for entities to apply certain amendments to existing hedges where the hedge documentation needs to be modified. We do not expect the adoption of this ASU to have a material impact on our financial condition, results of operations or cash flows. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Accordingly, the amendments require an entity in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. We do not expect the adoption of this ASU to have a material impact on our financial condition, results of operations or cash flows. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Feb. 03, 2019 | |
Property and Equipment | Note B: Property and Equipment Property and equipment consists of the following: In thousands Feb. 3, 2019 Jan. 28, 2018 Leasehold improvements $ 950,259 $ 950,024 Fixtures and equipment 836,400 800,003 Capitalized software 733,941 621,730 Land and buildings 175,181 173,457 Corporate systems projects in progress 39,416 65,283 Construction in progress 1 7,205 8,615 Total 2,742,402 2,619,112 Accumulated depreciation (1,812,767 ) (1,686,829 ) Property and equipment, net $ 929,635 $ 932,283 1 Construction in progress primarily consists of leasehold improvements and furniture and fixtures related to new, expanded or remodeled retail stores where construction had not been completed as of year-end. |
Borrowing Arrangements
Borrowing Arrangements | 12 Months Ended |
Feb. 03, 2019 | |
Borrowing Arrangements | Note C: Borrowing Arrangements Credit Facility We have a credit facility which provides for a $500,000,000 unsecured revolving line of credit (“revolver”) and a $300,000,000 unsecured term loan facility (“term loan”). The revolver may be used to borrow revolving loans or request the issuance of letters of credit. We may, upon notice to the administrative agent, request existing or new lenders to increase the revolver by up to $250,000,000, at such lenders’ option, to provide for a total of $750,000,000 of unsecured revolving credit. The revolver matures on January 8, 2023, at which time all outstanding borrowings must be repaid and all outstanding letters of credit must be cash collateralized. We may, prior to the first and second anniversaries of the closing date of the amendment of the credit facility, elect to extend the maturity date for an additional year, subject to lender approval. During fiscal 2018, we had borrowings of $60,000,000 under the revolver (at a weighted average interest rate of 3.20%), all of which were repaid in the fourth quarter of fiscal 2018, and no amounts were outstanding as of February 3, 2019. During fiscal 2017, we had borrowings of $170,000,000 under the revolver (at a weighted average interest rate of 2.21%), all of which were repaid in the fourth quarter of fiscal 2017, and no amounts were outstanding as of January 28, 2018. Additionally, as of February 3, 2019, $11,732,000 in issued but undrawn standby letters of credit were outstanding under the revolver. The standby letters of credit were issued to secure the liabilities associated with workers’ compensation and other insurance programs. As of February 3, 2019, we had $300,000,000 outstanding under our term loan (at a weighted average interest rate of 3.21%). The term loan matures on January 8, 2021, at which time all outstanding principal and any accrued interest must be repaid. Costs incurred in connection with the issuance of the term loan are presented as a reduction to the carrying value of the debt in our Consolidated Balance Sheet. The interest rate under the credit facility is variable, and may be elected by us as: (i) the London Interbank Offer Rate (“LIBOR”) plus an applicable margin based on our leverage ratio ranging from 0.91% to 1.775% for a revolver borrowing, and 1.0% to 2.0% for the term loan; or (ii) a base rate as defined in the credit facility, plus an applicable margin ranging from 0% to 0.775% for a revolver borrowing, and 0% to 1.0% for the term loan. As of February 3, 2019, we were in compliance with our covenants under the credit facility and, based on current projections, we expect to remain in compliance throughout fiscal 2019. Letter of Credit Facilities We have three unsecured letter of credit reimbursement facilities for a total of $70,000,000, each of which matures on August 24, 2019. The letter of credit facilities contain covenants that are consistent with our credit facility. Interest on unreimbursed amounts under the letter of credit facilities accrues at a base rate as defined in the credit facility, plus margin based on our leverage ratio. As of February 3, 2019, an aggregate of $6,820,000 was outstanding under the letter of credit facilities, which represents only a future commitment to fund inventory purchases to which we had not taken legal title. The latest expiration possible for any future letters of credit issued under the facilities is January 21, 2020. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 03, 2019 | |
Income Taxes | Note D: Income Taxes The 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. Among other things, the Tax Act reduced the corporate income tax rate to 21.0% Staff Accounting Bulletin No. 118 (“SAB 118”) issued by the SEC in December 2017 provided us up to one year to finalize our measurement of the income tax effects of the 2017 Tax Cuts and Jobs Act (“the Tax Act”) on our fiscal year ended January 28, 2018. As of January 28, 2018, we had made reasonable estimates of the income tax effects of the Tax Act, including the transition tax under Internal Revenue Code section 965. As of February 3, 2019, we have completed the accounting for the income tax effects of the Tax Act based on our current interpretation of available notices and regulations issued and proposed by the U.S. Department of the Treasury and the Internal Revenue Service. As a result, during fiscal 2018, we recorded an immaterial adjustment to the fiscal 2017 provisional transition tax amount. In addition, during fiscal 2018, we booked a net tax benefit of approximately $10,576,000 from the re-measurement of our deferred tax assets. The components of earnings before income taxes, by tax jurisdiction, are as follows: In thousands Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) United States $ 333,594 $ 379,000 $ 425,517 Foreign 95,653 73,439 46,394 Total earnings before income taxes $ 429,247 $ 452,439 $ 471,911 The provision for income taxes consists of the following: In thousands Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) Current Federal $ 43,745 $ 97,202 $ 125,760 State 15,357 19,552 26,197 Foreign 12,822 12,759 7,453 Total current 71,924 129,513 159,410 Deferred Federal 23,507 62,893 8,307 State 1,562 460 (807 ) Foreign (1,430 ) 28 (386 ) Total deferred 23,639 63,381 7,114 Total provision $ 95,563 $ 192,894 $ 166,524 We have historically elected not to provide for U.S. income taxes with respect to the undistributed earnings of our foreign subsidiaries as we intended to utilize those earnings in our foreign operations for an indefinite period of time. Under Internal Revenue Code section 965 of the Tax Act, we are deemed to have distributed all the post-1986 earnings of our foreign subsidiaries to the U.S. as of December 31, 2017. In light of the Tax Act, we re-evaluated our permanent reinvestment assertion with respect to unremitted foreign earnings, and we are now only permanently reinvested with respect to our foreign earnings in Canada beginning in fiscal 2018. As a result, we recorded approximately $1,493,000 of foreign withholding tax and additional state income tax in fiscal 2018. As of February 3, 2019, the post-fiscal 2017 earnings of our Canadian subsidiary are permanently reinvested. If we did not consider these earnings to be permanently reinvested, the deferred tax liability would have been immaterial as of February 3, 2019. In fiscal 2018, we are subject to several provisions of the Tax Act, including GILTI, the base erosion anti-abuse tax and a deduction for foreign-derived intangible income. The company has elected to account for GILTI as a periodic expense when the tax arises. The net impact due to these provisions was immaterial in fiscal 2018. A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows: Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) Federal income taxes at the statutory rate 21.0 % 33.9 % 35.0 % Re-measurement of deferred tax assets and liabilities (2.2 %) 6.7 % — Transition tax (0.6 %) 2.9 % — State income tax rate 3.8 % 2.5 % 3.5 % Change in uncertain tax positions 4.1 % (1.6 %) 2.8 % Rate differential (2.3 %) (2.9 %) (5.7 %) Research and development credits (2.1 %) — — Other 0.6 % 1.1 % (0.3 %) Effective tax rate 22.3 % 42.6 % 35.3 % Significant components of our deferred income tax accounts are as follows: Deferred tax assets (liabilities), in thousands Feb. 3, 2019 Jan. 28, 2018 Deferred rent $ 18,942 $ 18,387 Merchandise inventories 18,703 23,314 Customer deposits 14,345 23,601 Stock-based compensation 14,281 9,024 Accrued liabilities 13,470 13,626 Compensation 11,251 14,127 State taxes 7,435 5,099 Executive deferred compensation 5,739 5,886 Federal and state net operating loss 4,223 6,026 Depreciation (31,557 ) (17,361 ) Deferred lease incentives (26,032 ) (24,854 ) Other (4,797 ) (3,116 ) Valuation allowance (3,542 ) (1,067 ) Prepaid catalog expenses (936 ) (5,386 ) Total deferred income tax assets, net $ 41,525 $ 67,306 As a result of the acquisition of Outward, Inc. (see Note O), we had net operating loss carry-forwards of $4,979,000 and $7,102,000 for U.S. federal and state, respectively, as of The following table summarizes the activity related to our gross unrecognized tax benefits: In thousands Fiscal 2018 Fiscal 2017 Fiscal 2016 Balance at beginning of year $ 18,051 $ 25,864 $ 13,290 Increases related to current year’s tax positions 4,694 3,345 11,772 Increases related to prior years’ tax positions 14,905 808 3,456 Decreases related to prior years’ tax positions (1,279 ) (10,610 ) (818 ) Lapses in statute of limitations (786 ) (1,356 ) (1,122 ) Settlements (376 ) — (714 ) Balance at end of year $ 35,209 $ 18,051 $ 25,864 As of February 3, 2019, we had $35,209,000 of gross unrecognized tax benefits of which $31,209,000 would, if recognized, affect the effective tax rate. We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of February 3, 2019 and January 28, 2018, our accruals for the payment of interest and penalties totaled $5,437,000 and $3,719,000, respectively. Due to the potential resolution of tax issues, it is reasonably possible that the balance of our gross unrecognized tax benefits could decrease within the next twelve months by a range of $0 to $10,800,000. We file income tax returns in the U.S. and foreign jurisdictions. We are subject to examination by the tax authorities in these jurisdictions. Our U.S. federal taxable years for which the statute of limitations has not expired are fiscal years 2014 to 2017. Substantially all material states, local and foreign jurisdictions’ statutes of limitations are closed for taxable years prior to 2014. |
Accounting for Leases
Accounting for Leases | 12 Months Ended |
Feb. 03, 2019 | |
Accounting for Leases | Note E: Accounting for Leases Operating Leases We lease store locations, distribution and manufacturing facilities, corporate facilities, customer care centers and certain equipment for our U.S. and foreign operations for original terms generally ranging from 5 to 22 years. Certain leases contain renewal options for periods up to 20 years. The rental payments for our store leases are typically structured as either: minimum rent; rent based on a percentage of store sales; minimum rent plus additional rent based on a percentage of store sales; or rent based on a percentage of store sales if a specified store sales threshold or contractual obligation of the landlord has not been met. Contingent rental payments, including rental payments that are based on a percentage of sales, cannot be predicted with certainty at the onset of the lease term. Accordingly, such contingent rental payments are recorded as incurred each period and are excluded from our calculation of deferred rent liability. Total rent expense for all operating leases was as follows: In thousands Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) Rent expense $ 271,522 $ 263,409 $ 251,066 Contingent rent expense 26,414 24,918 26,980 Rent expense before deferred lease incentive income 297,936 288,327 278,046 Deferred lease incentive income (26,189 ) (25,293 ) (25,298 ) Less: sublease rental income (522 ) (578 ) (558 ) Total rent expense 1 $ 271,225 $ 262,456 $ 252,190 1 Excludes all other occupancy-related costs including depreciation, common area maintenance, property taxes and utilities. The aggregate future minimum annual cash rental payments under non-cancellable operating leases in effect at February 3, 2019 were as follows: In thousands Lease Commitments 1 Fiscal 2019 $ 292,387 Fiscal 2020 262,429 Fiscal 2021 225,755 Fiscal 2022 190,263 Fiscal 2023 160,308 Thereafter 559,802 Total $ 1,690,944 1 Projected cash payments include only those amounts that are fixed and determinable as of the reporting date and are not necessarily representative of future expected rent expense. We currently pay rent for certain store locations based on a percentage of store sales. As future store sales cannot be predicted with certainty, projected payments for these locations are based on minimum rent, which is generally higher than rent based on a percentage of store sales. We incur other lease obligation expenses, such as common area maintenance and other executory costs, which are not fixed in nature and are thus not included in the future projected cash payments reflected above. In addition, projected cash payments do not include any benefit from deferred lease incentive income, which is reflected within “Total rent expense” above. Memphis-Based Distribution Facility In fiscal 2015,we entered into an agreement with a partnership comprised of the estate of W. Howard Lester, our former Chairman of the Board and Chief Executive Officer, and the estate of James A. McMahan, a former Director Emeritus and significant stockholder and two unrelated parties to lease a distribution facility in Memphis, Tennessee through July 2017. In fiscal 2017, we exercised the first of two one-year extensions available under the lease to extend the term through July 2018. Subsequently, in fiscal 2017, we amended the lease to further extend the term through July 2020. The amended lease provides for two additional one-year renewal options. We made annual rental payments of approximately $1,689,000, $1,629,000, and $1,599,000 plus applicable taxes, insurance and maintenance expenses in fiscal 2018, fiscal 2017 and fiscal 2016, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Feb. 03, 2019 | |
Earnings Per Share | Note F: Earnings Per Share The following is a reconciliation of net earnings and the number of shares used in the basic and diluted earnings per share computations: In thousands, except per share amounts Net Earnings Weighted Average Shares Earnings Per Share Fiscal 2018 (53 Weeks) Basic $ 333,684 81,420 $ 4.10 Effect of dilutive stock-based awards 920 Diluted $ 333,684 82,340 $ 4.05 Fiscal 2017 (52 Weeks) Basic $ 259,545 85,592 $ 3.03 Effect of dilutive stock-based awards 488 Diluted $ 259,545 86,080 $ 3.02 Fiscal 2016 (52 Weeks) Basic $ 305,387 88,594 $ 3.45 Effect of dilutive stock-based awards 868 Diluted $ 305,387 89,462 $ 3.41 Stock-based awards of 31,000, 577,000, and 261,000 were excluded from the computation of diluted earnings per share in fiscal 2018, fiscal 2017 and fiscal 2016, respectively, as their inclusion would be anti-dilutive. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Feb. 03, 2019 | |
Stock-Based Compensation | Note G: Stock-Based Compensation Equity Award Programs Our Amended and Restated 2001 Long-Term Incentive Plan (the “Plan”) provides for grants of incentive stock options, nonqualified stock options, stock-settled stock appreciation rights (collectively, “option awards”), restricted stock awards, restricted stock units (including those that are performance-based), deferred stock awards (collectively, “stock awards”) and dividend equivalents up to an aggregate 36,570,000 shares. As of February 3, 2019, there were approximately 7,436,000 shares available for future grant. Awards may be granted under the Plan to officers, employees and non-employee members of the Option Awards Annual grants of option awards are limited to 1,000,000 shares on a per person basis and have a maximum term of seven years. The exercise price of these option awards is not less than 100% of the closing price of our stock on the day prior to the grant date. Option awards granted to employees generally vest evenly over a period of four years for service-based awards. Certain option awards contain vesting acceleration clauses resulting from events including, but not limited to, retirement, merger or a similar corporate event. Stock Awards Annual grants of stock awards are limited to 1,000,000 shares on a per person basis and have a maximum term of seven years. Stock awards granted to employees generally vest evenly over a period of four years for service-based awards. Certain performance-based awards, which have variable payout conditions based on predetermined financial targets, vest three years from the date of grant. Certain stock awards and other agreements contain vesting acceleration clauses resulting from events including, but not limited to, retirement, merger or a similar corporate event. Stock awards granted to non-employee Board members generally vest in one year. Non-employee Board members automatically receive stock awards on the date of their initial election to the Board and annually thereafter on the date of the annual meeting of stockholders (so long as they continue to serve as a non-employee Board member). Stock-Based Compensation Expense During fiscal 2018, fiscal 2017 and fiscal 2016, we recognized total stock-based compensation expense, as a component of selling, general and administrative expenses, of $59,802,000, $42,988,000, and $51,116,000, respectively. As of February 3, 2019, there was $78,694,000 of unrecognized stock-based compensation expense (net of estimated forfeitures), which we expect to recognize on a straight-line basis over a weighted average remaining service period of approximately two years. At each reporting period, all compensation expense attributable to vested awards has been fully recognized. Stock-Settled Stock Appreciation Rights A stock-settled stock appreciation right is an award that allows the recipient to receive common stock equal to the appreciation in the fair market value of our common stock between the grant date and the conversion date for the number of shares converted. The following table summarizes our stock-settled stock appreciation right activity during fiscal 2018: Shares Weighted Average Conversion Price 1 Balance at January 28, 2018 (100% vested) 167,737 $ 30.91 Granted — — Converted into common stock (166,447 ) 30.83 Cancelled (1,290 ) 40.87 Balance at February 3, 2019 — $ — 1 Conversion price is equal to the market value on the date of grant. No stock-settled stock appreciation rights were granted in fiscal 2018, fiscal 2017 or fiscal 2016. The total intrinsic value of awards converted to common stock was $4,394,000 for fiscal 2018, $7,287,000 for fiscal 2017 and $5,237,000 for fiscal 2016. Intrinsic value for conversions is based on the excess of the market value on the date of conversion over the conversion price. Restricted Stock Units The following table summarizes our restricted stock unit activity during fiscal 2018: Shares Weighted Average Grant Date Fair Value Weighted Average Contractual Term Remaining (Years) Intrinsic Value 1 Balance at January 28, 2018 2,358,137 $ 58.18 Granted 1,432,954 49.72 Granted, with vesting subject to performance conditions 256,350 48.76 Released (677,251 ) 59.47 Cancelled (357,267 ) 60.48 Balance at February 3, 2019 3,012,923 $ 52.88 3.03 $ 162,698,000 Vested plus expected to vest at February 3, 2019 2,389,343 $ 52.74 3.10 $ 129,025,000 1 Intrinsic value for outstanding and unvested restricted stock units is based on the market value of our common stock on the last business day of the fiscal year (or $54.00). The following table summarizes additional information about restricted stock units: Fiscal 2018 Fiscal 2017 Fiscal 2016 Weighted average grant date fair value per share of awards granted $ 49.57 $ 52.76 $ 59.17 Intrinsic value of awards released 1 $ 34,213,000 $ 35,508,000 $ 56,405,000 1 Intrinsic value for releases is based on the market value on the date of release. Tax Effect In accordance with ASU 2016-09 , Improvements to Employee Share-Based Payment Accounting , we record excess tax benefits and deficiencies resulting from the settlement of stock-based awards as a benefit or expense within income taxes in the period in which they occur. Further, in accordance with the ASU, we no longer classify such tax benefits as a financing cash inflow and an operating cash outflow. We adopted the classification requirements of this ASU prospectively as of the first quarter of fiscal 2017 and, as such, our Consolidated Statement of Cash Flows for fiscal 2016 has not been retrospectively adjusted. During fiscal 2018, fiscal 2017 and fiscal 2016, proceeds related to stock-based awards were $0, $0 and $1,532,000, respectively, and the current tax benefit related to stock-based awards totaled $9,927,000, $16,066,000 and $24,129,000, respectively. |
Williams-Sonoma, Inc. 401(k) Pl
Williams-Sonoma, Inc. 401(k) Plan and Other Employee Benefits | 12 Months Ended |
Feb. 03, 2019 | |
Williams-Sonoma, Inc. 401(k) Plan and Other Employee Benefits | Note H: Williams-Sonoma, Inc. 401(k) Plan and Other Employee Benefits We have a defined contribution retirement plan, the Williams-Sonoma, Inc. 401(k) Plan (the “401(k) Plan”), which is intended to be qualified under Internal Revenue Code sections 401(a), 401(k), 401(m) and 4975(e)(7). The 401(k) Plan permits eligible employees to make salary deferral contributions up to 75% of their eligible compensation each pay period ( 7 Our matching contribution is equal to 50% of each participant’s salary deferral contribution, taking into account only those contributions that do not exceed 6% of the participant’s eligible pay for the pay period. Each participant’s matching contribution is earned on a semi-annual basis with respect to eligible salary deferrals for those participants that are employed with the company on June 30th or December 31st of the year in which the deferrals are made. Each associate must complete one year of service prior to receiving company matching contributions. For the first five years of the participant’s employment, all matching contributions vest at the rate of 20% per year of service, measuring service from the participant’s hire date. Thereafter, all matching contributions vest immediately. Our contributions to the plan were $9,036,000, $8,224,000 and $7,725,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The 401(k) Plan consists of two parts: a profit sharing plan portion and a stock bonus plan/employee stock ownership plan (the “ESOP”). The ESOP portion is the portion that is invested in the Williams-Sonoma, Inc. Stock Fund. The profit sharing and ESOP components of the 401(k) Plan are considered a single plan under Internal Revenue Code section 414(l). We also have a nonqualified executive deferred compensation plan that provides supplemental retirement income benefits for a select group of management. This plan permits eligible employees to make salary and bonus deferrals that are 100% vested. We have an unsecured obligation to pay in the future the value of the deferred compensation adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period. As of February 3, 2019 and January 28, 2018, $23,319,000 and $24,151,000, respectively, is included in other long-term liabilities related to these deferred compensation obligations. Additionally, we have purchased life insurance policies on certain participants to potentially offset these unsecured obligations. The cash surrender value of these policies was $25,390,000 and $25,550,000 as of February 3, 2019 and January 28, 2018, respectively, and is included in other assets, net. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 03, 2019 | |
Commitments and Contingencies | Note I: Commitments and Contingencies We are involved in lawsuits, claims and proceedings incident to the ordinary course of our business. These disputes, which are not currently material, are increasing in number as our business expands and our company grows. We review the need for any loss contingency reserves and establish reserves when, in the opinion of management, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. In view of the inherent difficulty of predicting the outcome of these matters, it may not be possible to determine whether any loss is probable or to reasonably estimate the amount of the loss until the case is close to resolution, in which case no reserve is established until that time. Any claims against us, whether meritorious or not, could result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits, claims and proceedings cannot be predicted with certainty. However, we believe that the ultimate resolution of these current matters will not have a material adverse effect on our Consolidated Financial Statements taken as a whole. |
Stock Repurchase Program and Di
Stock Repurchase Program and Dividends | 12 Months Ended |
Feb. 03, 2019 | |
Stock Repurchase Program and Dividends | Note J: Stock Repurchase Program and Dividends During fiscal 2018, we repurchased 5,373,047 shares of our common stock at an average cost of $54.96 per share and a total cost of approximately $295,304,000 under our stock repurchase program. As of February 3, 2019, there was approximately $223,815,000 remaining under our current stock repurchase program. In March 2019, our Board of Directors authorized an increase in our current stock repurchase program $500,000,000. As of February 3, 2019, we held treasury stock of $235,000 that represents the cost of shares available for issuance intended to satisfy future stock-based award settlements in certain foreign jurisdictions. During fiscal 2017, we repurchased 4,050,697 shares of our common stock at an average cost of $48.43 per share and a total cost of approximately $196,179,000. During fiscal 2016, we repurchased 2,871,480 shares of our common stock at an average cost of $52.68 per share and a total cost of approximately $151,272,000. Stock repurchases under our program may be made through open market and privately negotiated transactions at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability and other market conditions. Total cash dividends declared in fiscal 2018, fiscal 2017 and fiscal 2016, were approximately $144,609,000, or $1.72 per common share, $135,779,000, or $1.56 per common share and $133,588,000, or $1.48 per common share, respectively. In March 2019, our Board of Directors authorized a 0.05, or 11.6%, increase in our quarterly cash dividend, from $0.43 to $0.48 per common share, subject to capital availability. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Feb. 03, 2019 | |
Segment Reporting | Note K: Segment Reporting We have two reportable segments, e-commerce and retail. The e-commerce segment has the following merchandise strategies: Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams Sonoma Home, Rejuvenation and Mark and Graham, which sell our products through our e-commerce websites and direct-mail catalogs. Our e-commerce merchandise strategies are operating segments, which have been aggregated into one reportable segment, e-commerce. The retail segment, which includes our franchise operations, has the following merchandise strategies: Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm and Rejuvenation, which sell our products through our retail stores. Our retail merchandise strategies are operating segments, which have been aggregated into one reportable segment, retail. Management’s expectation is that the overall economic characteristics of each of our operating segments will be similar over time based on management’s judgment that the operating segments have had similar historical economic characteristics and are expected to have similar long-term financial performance in the future. These reportable segments are strategic business units that offer similar products for the home. They are managed separately because the business units utilize two distinct distribution and marketing strategies. Based on management’s best estimate, our operating segments include allocations of certain expenses, including advertising and employment costs, to the extent they have been determined to benefit both channels. These operating segments are aggregated at the channel level for reporting purposes due to the fact that our brands are interdependent for economies of scale and we do not maintain fully allocated income statements at the brand level. As a result, material financial decisions related to the brands are made at the channel level. Furthermore, it is not practicable for us to report revenue by product We use operating income to evaluate segment profitability. Operating income is defined as earnings (loss) before net interest income (expense) and income taxes. Unallocated costs before interest and income taxes include corporate employee-related costs, occupancy expenses (including depreciation expense), administrative costs and third-party service costs, primarily in our corporate administrative and systems departments. Unallocated assets include corporate cash and cash equivalents, prepaid expenses, the net book value of corporate facilities and related information systems, deferred income taxes and other corporate long-lived assets. Income taxes are calculated at an entity level and are not allocated to our reportable segments. Segment Information In thousands E-commerce Retail Unallocated Total Fiscal 2018 (53 Weeks) Net revenues 1 $ 3,082,064 $ 2,589,529 $ — $ 5,671,593 Depreciation and amortization expense 36,294 89,419 63,095 188,808 Operating income (loss) 2 643,592 217,070 (424,709 ) 435,953 Assets 3 914,452 1,183,604 714,788 2,812,844 Capital expenditures 45,151 82,840 62,111 190,102 Fiscal 2017 (52 Weeks) Net revenues 1 $ 2,778,457 $ 2,513,902 $ — $ 5,292,359 Depreciation and amortization expense 28,977 90,625 63,475 183,077 Operating income (loss) 4 599,491 224,608 (370,288 ) 453,811 Assets 3 776,569 1,114,726 894,454 2,785,749 Capital expenditures 39,273 83,750 66,689 189,712 Fiscal 2016 (52 Weeks) Net revenues 1 $ 2,633,602 $ 2,450,210 $ — $ 5,083,812 Depreciation and amortization expense 31,135 86,228 55,832 173,195 Operating income (loss) 4 606,286 231,929 (365,616 ) 472,599 Assets 3 614,213 1,077,593 785,073 2,476,879 Capital expenditures 21,479 102,859 73,076 197,414 1 Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $ 346.8 million, $ 328.2 million and $ 321.2 million in fiscal 2018, fiscal 2017 and fiscal 2016 respectfully. 2 The 53 weeks ended February 3, 2019 includes approximately $25.2 million of expense related to our acquisition of Outward (primarily acquisition-related compensation costs, the amortization of intangible assets acquired, and the operations of the Outward business), of which $19.6 million is recorded in the e-commerce segment and $5.5 million is recorded in the unallocated segment; $13.2 million of expense related to impairment and early lease termination charges which is primarily recorded in the retail segment; and $8.0 million of employment-related expense primarily associated with an equity grant, which is recorded within the unallocated segment. 3 Includes long-term assets related to our international operations of approximately $ 50.3 million, $ 63.4 million and $ 59.2 million in fiscal 2018, fiscal 2017 and fiscal 2016. 4 The 52 weeks ended January 28, 2018 includes approximately $ 8.6 million for severance-related charges, primarily in our corporate functions, which is recorded within the unallocated segment and approximately $6.2 million for costs related to the acquisition of Outward and its ongoing operations, of which $3.3 million is recorded in the e-commerce segment and $2.9 million is recorded in the unallocated segment. The 52 weeks ended January 29, 2017 includes $ 14.4 million for severance-related reorganization charges, primarily in our corporate functions, which is recorded within the unallocated segment. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Feb. 03, 2019 | |
Derivative Financial Instruments | Note L: Derivative Financial Instruments We have retail and e-commerce businesses in Canada, Australia and the United Kingdom, and operations throughout Asia and Europe, which expose us to market risk associated with foreign currency exchange rate fluctuations. Substantially all of our purchases and sales are denominated in U.S. dollars, which limits our exposure to this risk. However, some of our foreign operations have a functional currency other than the U.S. dollar. To mitigate this risk, we hedge a portion of our foreign currency exposure with foreign currency forward contracts in accordance with our risk management policies. We do not enter into such contracts for speculative purposes. The assets or liabilities associated with the derivative financial instruments are measured at fair value and recorded in either other current or long-term assets or other current or long-term liabilities. As discussed below, the accounting for gains and losses resulting from changes in fair value depends on whether the derivative financial instrument is designated as a hedge and qualifies for hedge accounting in accordance with Derivatives and Hedging Cash Flow Hedges We enter into foreign currency forward contracts designated as cash flow hedges (to sell Canadian dollars and purchase U.S. dollars) for forecasted inventory purchases in U.S. dollars by our Canadian subsidiary. These hedges have terms of up to 18 months. All hedging relationships are formally documented, and the forward contracts are designed to mitigate foreign currency exchange risk on hedged transactions. We record the effective portion of changes in the fair value of our cash flow hedges in other comprehensive income (“OCI”) until the earlier of when the hedged forecasted inventory purchase occurs or the respective contract reaches maturity. Subsequently, as the inventory is sold to the customer, we reclassify amounts previously recorded in OCI to cost of goods sold. Changes in the fair value of the forward contract related to interest charges (or forward points) are excluded from the assessment and measurement of hedge effectiveness and are recorded immediately in selling, general and administrative expenses. Based on the rates in effect as of February 3, 2019, we expect to reclassify a net pre-tax gain of approximately $253,000 from OCI to cost of goods sold over the next 12 months. We also enter into non-designated foreign currency forward contracts (to sell Australian dollars and British pounds and purchase U.S. dollars) to reduce the exchange risk associated with our assets and liabilities denominated in a foreign currency. Any foreign exchange gains or losses related to these contracts are recognized in selling, general and administrative expenses. As of February 3, 2019, and January 28, 2018, we had foreign currency forward contracts outstanding (in U.S. dollars) with notional values as follows: In thousands Feb. 3, 2019 Jan. 28, 2018 Contracts designated as cash flow hedges $ 16,600 $ 28,200 Contracts not designated as cash flow hedges $ 5,300 $ 46,000 Hedge effectiveness is evaluated prospectively at inception, on an ongoing basis, as well as retrospectively using regression analysis. Any measurable ineffectiveness of the hedge is recorded in selling, general and administrative expenses. No gain or loss was recognized for cash flow hedges due to hedge ineffectiveness and all hedges were deemed effective for assessment purposes for fiscal 2018, fiscal 2017 and fiscal 2016. The effect of derivative instruments in our Consolidated Financial Statements, pre-tax, was as follows: In thousands Fiscal 2018 Fiscal 2017 Fiscal 2016 Net gain (loss) recognized in OCI $ 1,488 $ (974 ) $ (1,243 ) Net gain (loss) reclassified from OCI to cost of goods sold $ 478 $ (144 ) $ (147 ) Net foreign exchange gain (loss) recognized in selling, general and administrative expenses: Instruments designated as cash flow hedges 1 $ 57 $ 88 $ (4 ) Instruments not designated or de-designated $ 3,967 $ (3,286 ) $ (3,569 ) 1 Changes in fair value of the forward contract related to interest charges (or forward points). The fair values of our derivative financial instruments are presented below according to their classification in our Consolidated Balance Sheets. All fair values were measured using Level 2 inputs as defined by the fair value hierarchy described in Note M. In thousands Feb. 3, 2019 Jan. 28, 2018 Derivatives designated as cash flow hedges: Other current assets $ 358 $ — Other current liabilities $ — $ (635 ) Other long-term liabilities $ — $ (54 ) Derivatives not designated as hedging instruments: Other current assets $ 4 $ — Other current liabilities $ — $ (299 ) We record all derivative assets and liabilities on a gross basis. They do not meet the balance sheet netting criteria as discussed in ASC 210, Balance Sheet , because we do not have master netting agreements established with our derivative counterparties that would allow for net settlement. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Feb. 03, 2019 | |
Fair Value Measurements | Note M: Fair Value Measurements Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We determine the fair value of financial and non-financial assets and liabilities using the fair value hierarchy established by ASC 820, Fair Value Measurement , which defines three levels of inputs that may be used to measure fair value, as follows: • Level 1: inputs which include quoted prices in active markets for identical assets or liabilities; • Level 2: inputs which include observable inputs other than Level 1 inputs, such as quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and • Level 3: inputs which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. The fair values of our cash and cash equivalents are based on Level 1 inputs, which include quoted prices in active markets for identical assets. Long-term Debt As of February 3, 2019, the fair value of our long-term debt, which consists of outstanding borrowings under our term loan, approximates its carrying value, as the instrument is relatively short-term in nature and the interest rate under the term loan is based on observable Level 2 inputs, primarily quoted market interest rates for instruments with similar maturities. Foreign Currency Derivatives and Hedging Instruments We use the income approach to value our derivatives using observable Level 2 market data at the measurement date and standard valuation techniques to convert future amounts to a single present value amount, assuming that participants are motivated but not compelled to transact. Level 2 inputs are limited to quoted prices that are observable for the assets and liabilities, which include interest rates and credit risk ratings. We use mid-market pricing as a practical expedient for fair value measurements. Key inputs for foreign currency derivatives are the spot rates, forward rates, interest rates and credit derivative market rates. The counterparties associated with our foreign currency forward contracts are large credit-worthy financial institutions, and the derivatives transacted with these entities are relatively short in duration, therefore, we do not consider counterparty concentration and non-performance to be material risks at this time. Both we and our counterparties are expected to perform under the contractual terms of the instruments. None of the derivative contracts entered into are subject to credit risk-related contingent features or collateral requirements. Property and Equipment We review the carrying value of all long-lived assets for impairment, primarily at an individual store level, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We measure these assets at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. The fair value is based on the present value of estimated future cash flows using a discount rate that approximates our weighted average cost of capital. There were no transfers between Level 1, 2 or 3 categories during fiscal 2018 or fiscal 2017. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (loss) | 12 Months Ended |
Feb. 03, 2019 | |
Accumulated Other Comprehensive Income | Note N: Accumulated Other Comprehensive Income (loss) Changes in accumulated other comprehensive income (loss) by component, net of tax, are as follows: In thousands Foreign Currency Translation Cash Flow Hedges Accumulated Other Comprehensive Income (Loss) Balance at January 31, 2016 $ (11,480 ) $ 864 $ (10,616 ) Foreign currency translation adjustments 1,523 — 1,523 Change in fair value of derivative financial instruments — (916 ) (916 ) Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — 106 106 Other comprehensive income (loss) 1,523 (810 ) 713 Balance at January 29, 2017 (9,957 ) 54 (9,903 ) Foreign currency translation adjustments 3,730 — 3,730 Change in fair value of derivative financial instruments — (715 ) (715 ) Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — 106 106 Other comprehensive income (loss) 3,730 (609 ) 3,121 Balance at January 28, 2018 (6,227 ) (555 ) (6,782 ) Foreign currency translation adjustments (5,032 ) — (5,032 ) Change in fair value of derivative financial instruments — 1,098 1,098 Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — (357 ) (357 ) Other comprehensive income (loss) (5,032 ) 741 (4,291 ) Balance at February 3, 2019 $ (11,259 ) $ 186 $ (11,073 ) 1 Refer to Note L for additional disclosures about reclassifications out of accumulated other comprehensive income and their corresponding effects on the respective line items in the Consolidated Statements of Earnings. |
Acquisition of Outward, Inc.
Acquisition of Outward, Inc. | 12 Months Ended |
Feb. 03, 2019 | |
Acquisition of Outward, Inc. | Note O: Acquisition of Outward, Inc. On December 1, 2017, we acquired Outward, Inc., a 3-D imaging and augmented reality platform for the home furnishings and décor industry. Of the $112,000,000 contractual purchase price, approximately $80,812,000 was deemed to be purchase consideration, $26,690,000 is payable to former stockholders of Outward over a period of four years from the acquisition date, contingent upon their continued service during that time, and $4,498,000 primarily represents settlement of pre-existing obligations of Outward with third parties on the acquisition date. Certain key employees of Outward may also collectively earn up to an additional $20,000,000, contingent upon achievement of certain financial performance targets, and subject to their continued service over the performance period. Both of these contingent amounts will be recognized as post-combination compensation expense as they are earned. The purchase consideration has been allocated based on estimates of the fair value of identifiable assets acquired and liabilities assumed, as set forth in the table below. In thousands Working capital and other assets $ 718,000 Property and equipment, net 2,049,000 Intangible assets 18,300,000 Liabilities (6,886,000 ) Total identifiable net assets acquired $ 14,181,000 Goodwill 66,631,000 Total purchase consideration $ 80,812,000 During the second quarter of fiscal 2018, we finalized the valuation of intangible assets acquired, which primarily represent 3-D imaging data and core intellectual property which are being amortized over a useful life of four years. Goodwill is primarily attributable to expected synergies as a result of the acquisition, which include the leverage of acquired technology and talent to drive improved conversion, cost savings and operating efficiencies. Goodwill of $55,215,000 and $11,416,000 was assigned to the e-commerce and retail reportable segments, respectively. None of the goodwill will be deductible for income tax purposes. Outward is a wholly-owned subsidiary of Williams-Sonoma, Inc. Results of operations for Outward have been included in our Consolidated Financial Statements from the acquisition date. Pro forma results of Outward have not been presented as the results are insignificant to our Consolidated Financial Statements for all periods presented and would not have been significant had the acquisition occurred at the beginning of fiscal 2017. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 03, 2019 | |
Reclassification | Reclassifications Certain amounts reported in our Consolidated Balance Sheet as of January 28, 2018 and our Consolidated Statements of Cash Flows for the fifty-two weeks ended January 28, 2018 and January 29, 2017 have been reclassified in order to conform to the current period presentation. These reclassifications impacted prepaid catalog expenses, prepaid expenses, goodwill, other long-term assets, accounts payable, accrued expenses, gift card and other deferred revenue and other current liabilities. There was no change to total current assets, total assets, total current liabilities, or cash flows as a result of these reclassifications. |
Fiscal Year | Fiscal Year Our fiscal year ends on the Sunday closest to January 31, based on a 52 or 53-week year. Fiscal 2018, a 53-week year, ended on February 3, 2019; Fiscal 2017, a 52-week year, ended on January 28, 2018; and Fiscal 2016, a 52-week year, ended on January 29, 2017. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. These estimates and assumptions are evaluated on an ongoing basis and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ from these estimates. |
Cash Equivalents | Cash Equivalents Cash equivalents include highly liquid investments with an original maturity of three months or less. As of February 3, 2019, we were invested primarily in interest-bearing demand deposit accounts and money market funds. Book cash overdrafts issued, but not yet presented to the bank for payment, are reclassified to accounts payable. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at their carrying values, net of an allowance for doubtful accounts. Accounts receivable consist primarily of credit card, franchisee and landlord receivables for which collectability is reasonably assured. Receivables are evaluated for collectability on a regular basis and an allowance for doubtful accounts is recorded, if necessary. Our allowance for doubtful accounts was not material to our financial statements as of February 3, 2019 and January 28, 2018. |
Merchandise Inventories | Merchandise Inventories Merchandise inventories, net of an allowance for shrinkage and obsolescence, are stated at the lower of cost (weighted average method) or market. To determine if the value of our inventory should be reduced below cost, we consider current and anticipated demand, customer preferences and age of the merchandise. The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage. We reserve for obsolescence based on historical trends, aging reports, specific identification and our estimates of future sales and selling prices. Reserves for shrinkage are estimated and recorded throughout the year as a percentage of net sales based on historical shrinkage results, cycle count results within our distribution centers, expectations of future shrinkage and current inventory levels. Actual shrinkage is recorded at year-end based on the results of our physical inventory counts and can vary from our estimates due to such factors as changes in operations, the mix of our inventory (which ranges from large furniture to small tabletop items) and execution against loss prevention initiatives in our stores, distribution facilities, off-site storage locations, and with our third-party warehouse and transportation providers. Accordingly, there is no shrinkage reserve at year-end, with the exception of a cycle count reserve based on the historical cycle count results in our distribution centers. This reserve was not material to our Consolidated Financial Statements as of February 3, 2019. Historically, actual shrinkage has not differed materially from our estimates. Our obsolescence and shrinkage reserve calculations contain estimates that require management to make assumptions and to apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. If actual obsolescence or shrinkage estimates change from our original estimate, we will adjust our reserves accordingly throughout the year. We have made no material changes to our assumptions included in the calculations of the obsolescence and shrinkage reserves throughout the year. As of February 3, 2019, and January 28, 2018, our inventory obsolescence reserves were $13,580,000 and $12,649,000, respectively. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives of the assets: Leasehold improvements Shorter of estimated useful life or lease term (generally 5 – 22 years) Fixtures and equipment 2 – 20 years Buildings and building improvements 10 – 40 years Capitalized software 2 – 10 years We review the carrying value of all long-lived assets for impairment, primarily at an individual store level, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Our impairment analyses determine whether projected cash flows from operations are sufficient to recover the carrying value of these assets. Impairment may result when the carrying value of the asset exceeds the estimated undiscounted future cash flows over its remaining useful life. For store impairment, our estimate of undiscounted future cash flows over the store lease term is based upon our experience, the historical operations of the stores and estimates of future store profitability and economic conditions. The estimates of future store profitability and economic conditions require estimating such factors as sales growth, gross margin, employment costs, lease escalations, inflation and the overall economics of the retail industry, and are therefore subject to variability and difficult to predict. Actual future results may differ from those estimates. If a long-lived asset is found to be impaired, the amount recognized for impairment is equal to the excess of the asset’s net carrying value over its fair value. Long-lived assets are measured at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy (see Note M). The fair value is based on the present value of estimated future cash flows using a discount rate that approximates our weighted average cost of capital. During fiscal 2018, we recorded asset impairment charges of approximately $9,639,000, related to our retail stores, which is recorded within selling, general and administrative expenses. During fiscal 2017, we did not record any asset impairment charges. During fiscal 2016, we recorded asset impairment charges of approximately $1,765,000, related to our retail stores. |
Goodwill | Goodwill Goodwill is initially recorded as of the acquisition date, and is measured as any excess of the purchase price over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized, but rather is subject to impairment testing annually (on the first day of the fourth quarter), or between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. We first perform a qualitative assessment to evaluate goodwill for potential impairment. If based on that assessment it is more likely than not that the fair value of the reporting unit is below its carrying value, a quantitative impairment test is necessary. The quantitative impairment test requires determining the fair value of the reporting unit. We use the income approach, whereby we calculate the fair value based on the present value of estimated future cash flows using a discount rate that approximates our weighted average cost of capital. The process of evaluating the potential impairment of goodwill is subjective and requires significant estimates and assumptions about the future such as sales growth, gross margins, employment costs, capital expenditures, inflation and future economic and market conditions. Actual future results may differ from those estimates. If the carrying value of the reporting unit’s assets and liabilities, including goodwill, exceeds its fair value, impairment is recorded for the excess, not to exceed the total amount of goodwill allocated to the reporting unit. As of February 3, 2019 and January 28, 2018, we had goodwill of $85,382,000 and $18,838,000, |
Self-Insured Liabilities | Self-Insured Liabilities We are primarily self-insured for workers’ compensation, employee health benefits, product and other general liability claims. We record self-insurance liability reserves based on claims filed, including the development of those claims, and an estimate of claims incurred but not yet reported, based on an actuarial analysis of historical claims data. Factors affecting these estimates include future inflation rates, changes in severity, benefit level changes, medical costs and claim settlement patterns. Should a different number of claims occur compared to what was estimated, or costs of the claims increase or decrease beyond what was anticipated, reserves may need to be adjusted accordingly. Self-insurance reserves for workers’ compensation, employee health benefits, product and other general liability claims were $28,542,000 and $26,370,000 as of February 3, 2019 and January 28, 2018, respectively. |
Deferred Rent and Lease Incentives | Deferred Rent and Lease Incentives For leases that contain fixed escalations of the minimum annual lease payment during the original term of the lease, we recognize rent expense on a straight-line basis over the lease term, including the construction period, and record the difference between rent expense and the amount currently payable as deferred rent. Deferred lease incentives include construction allowances received from landlords, which are amortized on a straight-line basis over the lease term, including the construction period. For any store or facility closure where a lease obligation still exists, we record the estimated future liability associated with the rental obligation on the cease use date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of cash and cash equivalents, accounts receivable, accounts payable and debt approximate their estimated fair values. We use derivative financial instruments to hedge against foreign currency exchange rate fluctuations. The assets or liabilities associated with our derivative financial instruments are recorded at fair value in either other current or long-term assets or other current or long-term liabilities. The fair value of our foreign currency derivative instruments is measured using the income approach whereby we use observable market data at the measurement date and standard valuation techniques to convert future amounts to a single present value amount. These observable inputs include spot rates, forward rates, interest rates and credit derivative market rates (see Notes L and M for additional information). |
Merchandise Sales | Merchandise Sales Revenues from the sale of our merchandise through our e-commerce channel, at our retail stores, as well as to our franchisees and wholesale customers are, in each case, recognized at a point in time when control of merchandise is transferred to the customer. Merchandise can either be picked up in our stores, or delivered to the customer. For merchandise picked up in the store, control is transferred at the time of the sale to the customer. For merchandise delivered to the customer, control is transferred either when delivery has been completed, or when we have a present right to payment which, for certain merchandise, occurs upon conveyance of the merchandise to the carrier for delivery. We exclude from revenue any taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and are concurrent with revenue-generating activities. Our payment terms are primarily at the point of sale for merchandise sales and for most services. We have elected to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. Revenue from the sale of merchandise is reported net of sales returns. We estimate future returns based on historical return trends together with current product sales performance. As of February 3, 2019, we recorded a liability for expected sales returns of approximately $26,276,000 within other current liabilities and a corresponding asset for the expected net realizable value of the merchandise inventory to be returned of approximately $10,030,000 within other current assets in our Consolidated Balance Sheet. Prior to the adoption of Auditing Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers |
Gift Card and Other Deferred Revenue | Gift Card and Other Deferred Revenue We defer revenue when cash payments are received in advance of satisfying performance obligations, primarily associated with our stored-value cards, merchandise sales, customer loyalty programs, and incentives received from credit card issuers. We issue stored-value cards that may be redeemed on future merchandise purchases at our stores or through our e-commerce channel. Our stored-value cards have no expiration dates. Revenue from stored-value cards is recognized at a point in time upon redemption of the card and as control of the merchandise is transferred to the customer. Revenue from estimated unredeemed stored-value cards (breakage) is recognized in a manner consistent with our historical redemption patterns over the estimated period of redemption of our cards of approximately four years, the majority of which is recognized within one year of the card issuance. Breakage revenue is not material to our Consolidated Financial Statements. For merchandise sales, we record a liability at each period end where we have not fulfilled our obligation to transfer goods or services to the customer, but for which we have already received consideration or have a right to consideration. We have customer loyalty programs which allow members to earn points for each qualifying purchase. Points earned enable members to receive certificates that may be redeemed on future merchandise purchases at our stores or through our e-commerce channel. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The allocated consideration for the points earned by our loyalty program members is deferred based on the standalone selling price of the points and recorded within gift card and other deferred revenue within our Consolidated Balance Sheet. The measurement of standalone selling prices takes into consideration the discount the customer would receive in a separate transaction for the delivered item, as well as our estimate of certificates expected to be redeemed, based on historical redemption patterns. This measurement is applied to our portfolio of performance obligations for points earned, as all obligations have similar economic characteristics. We believe the impact to our Consolidated Financial Statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations relate to contracts with terms less than one year, as our certificates generally expire within 6 months from issuance. We enter into agreements with credit card issuers in connection with our private label and co-branded credit cards whereby we receive cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. Services promised under these agreements are interrelated and are thus considered a single performance obligation. Revenue is recognized over time as we transfer promised services throughout the contract term. As of February 3, 2019, we had recorded $298,435,000 for gift card and other deferred revenue in our Consolidated Balance Sheet, substantially all of which will be recognized into revenue within the next 12 months. |
Vendor Allowances | Vendor Allowances We receive allowances or credits from certain vendors for volume rebates. We treat such volume rebates as an offset to the cost of the product or services provided at the time the expense is recorded. These allowances and credits received are recorded in both cost of goods sold and in selling, general and administrative expenses. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes cost of goods, occupancy expenses and shipping costs. Cost of goods consists of cost of merchandise, inbound freight expenses, freight-to-store expenses and other inventory-related costs such as shrinkage, damages and replacements. Occupancy expenses consist of rent, depreciation and other occupancy costs, including common area maintenance, property taxes and utilities. Shipping costs consist of third-party delivery services and shipping materials. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses consist of non-occupancy-related costs associated with our retail stores, distribution facilities, customer care centers, supply chain operations (buying, receiving and inspection) and corporate administrative functions. These costs include employment, advertising, third-party credit card processing and other general expenses. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation arrangements by measuring and recognizing compensation expense for all stock-based awards using a fair value based method. Restricted stock units are valued using the closing price of our stock on the date prior to the date of grant. The fair value of each stock-based award is amortized over the requisite service period. |
Advertising Expenses | Advertising Expenses Advertising expenses consist of media and production costs related to digital advertising, catalog mailings and other direct marketing activities. All advertising costs are expensed as incurred, or upon the release of the initial advertisement. Prior to the adoption of ASU 2014-09 in fiscal 2018, prepaid advertising costs were capitalized and amortized over their expected period of future benefit of approximately three months. Total advertising expenses (including digital advertising, catalog advertising and other advertising costs) were approximately $390,115,000, $382,206,000 and $347,474,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively. |
Foreign Currency Translation | Foreign Currency Translation Some of our foreign operations have a functional currency other than the U.S. dollar. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the average exchange rates during the period. The resulting translation adjustments are recorded as other comprehensive income within stockholders’ equity. Foreign currency exchange gains and losses are recorded in selling, general and administrative expenses, except for those discussed in Note L. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding plus common stock equivalents for the period. Common stock equivalents consist of shares subject to stock-based awards with exercise prices less than or equal to the average market price of our common stock for the period, to the extent their inclusion would be dilutive. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in our Consolidated Financial Statements. We record reserves for our estimates of the additional income tax liability that is more likely than not to result from the ultimate resolution of foreign and domestic tax examinations. At any one time, many tax years are subject to examination by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. We review and update the estimates used in the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, upon completion of tax examination, upon expiration of statutes of limitation, or upon occurrence of other events. In order to compute income tax on an interim basis, we estimate what our effective tax rate will be for the full fiscal year and adjust these estimates throughout the year as necessary. Adjustments to our income tax provision, due to changes in our estimated effective tax rate, are recorded in the interim period in which the change occurs. The tax expense (or benefit) related to items other than ordinary income is individually computed and recognized when the items occur. Our effective tax rate in a given financial statement period may be materially impacted by changes in the mix and level of our earnings in various taxing jurisdictions or changes in tax law. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers • the reclassification from selling, general and administrative expenses into net revenues for certain incentives received from credit card issuers, • the reclassification of breakage income related to our unredeemed stored-value cards from selling, general and administrative expenses into net revenues, as well as the acceleration in the timing of recognizing breakage income, • the acceleration in the timing of revenue recognition for certain merchandise shipped to our customers, and • the recording of a right of return asset for merchandise we expect to receive back from customers. In addition, prepaid catalog advertising costs, which were capitalized and amortized over their expected period of future benefit prior to adoption, and are now expensed as incurred. Prior period balances were not retrospectively adjusted as a result of adopting the ASU. The following summarizes the impact of adopting ASU 2014-09 on our Consolidated Statement of Earnings for the fiscal year ended February 3, 2019: In thousands As Reported ASU 2014-09 Adjustment As Adjusted Net revenue $ 5,671,593 $ (61,106 ) $ 5,610,487 Cost of goods sold 3,570,580 (6,059 ) 3,564,521 Gross profit 2,101,013 (55,047 ) 2,045,966 Selling, general and administrative expenses 1,665,060 (48,766 ) 1,616,294 Operating income $ 435,953 $ (6,281 ) $ 429,672 Other than the presentation of our sales returns liability and a right of return asset, which resulted in a reclassification of liabilities into other current assets, all other impacts to our Consolidated Balance Sheet from the adoption of this ASU were not material either individually or in the aggregate as of February 3, 2019. The adoption of this ASU had no net impact to our Consolidated Statement of Cash Flows for the fiscal year ended February 3, 2019. In Leases, In Intra-Entity Transfers of Assets Other than Inventory. In , Simplifying the Test for Goodwill Impairment, In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic 815), which expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The guidance also makes certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. This ASU is effective for us in the first quarter of fiscal 2019. Entities should apply the guidance to existing cash flow and net investment hedge relationships using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings on the date of adoption. The guidance also provides transition relief to make it easier for entities to apply certain amendments to existing hedges where the hedge documentation needs to be modified. We do not expect the adoption of this ASU to have a material impact on our financial condition, results of operations or cash flows. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Accordingly, the amendments require an entity in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. We do not expect the adoption of this ASU to have a material impact on our financial condition, results of operations or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Schedule of Estimated Useful Lives of Property, Plant And Equipment | Depreciation is computed using the straight-line method over the following estimated useful lives of the assets: Leasehold improvements Shorter of estimated useful life or lease term (generally 5 – 22 years) Fixtures and equipment 2 – 20 years Buildings and building improvements 10 – 40 years Capitalized software 2 – 10 years |
Accounting Standards Update 2014-09 | |
Summarize Impact of Adopting ASU 2014-09 to Consolidated Financial Statements | • the reclassification from selling, general and administrative expenses into net revenues for certain incentives received from credit card issuers, • the reclassification of breakage income related to our unredeemed stored-value cards from selling, general and administrative expenses into net revenues, as well as the acceleration in the timing of recognizing breakage income, • the acceleration in the timing of revenue recognition for certain merchandise shipped to our customers, and • the recording of a right of return asset for merchandise we expect to receive back from customers. In addition, prepaid catalog advertising costs, which were capitalized and amortized over their expected period of future benefit prior to adoption, and are now expensed as incurred. Prior period balances were not retrospectively adjusted as a result of adopting the ASU. The following summarizes the impact of adopting ASU 2014-09 on our Consolidated Statement of Earnings for the fiscal year ended February 3, 2019: In thousands As Reported ASU 2014-09 Adjustment As Adjusted Net revenue $ 5,671,593 $ (61,106 ) $ 5,610,487 Cost of goods sold 3,570,580 (6,059 ) 3,564,521 Gross profit 2,101,013 (55,047 ) 2,045,966 Selling, general and administrative expenses 1,665,060 (48,766 ) 1,616,294 Operating income $ 435,953 $ (6,281 ) $ 429,672 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Schedule of Property and Equipment | Property and equipment consists of the following: In thousands Feb. 3, 2019 Jan. 28, 2018 Leasehold improvements $ 950,259 $ 950,024 Fixtures and equipment 836,400 800,003 Capitalized software 733,941 621,730 Land and buildings 175,181 173,457 Corporate systems projects in progress 39,416 65,283 Construction in progress 1 7,205 8,615 Total 2,742,402 2,619,112 Accumulated depreciation (1,812,767 ) (1,686,829 ) Property and equipment, net $ 929,635 $ 932,283 1 Construction in progress primarily consists of leasehold improvements and furniture and fixtures related to new, expanded or remodeled retail stores where construction had not been completed as of year-end. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Schedule of Components of Earnings Before Income Taxes, By Tax Jurisdiction | The components of earnings before income taxes, by tax jurisdiction, are as follows: In thousands Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) United States $ 333,594 $ 379,000 $ 425,517 Foreign 95,653 73,439 46,394 Total earnings before income taxes $ 429,247 $ 452,439 $ 471,911 |
Schedule of Components of Provision for Income Taxes | The provision for income taxes consists of the following: In thousands Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) Current Federal $ 43,745 $ 97,202 $ 125,760 State 15,357 19,552 26,197 Foreign 12,822 12,759 7,453 Total current 71,924 129,513 159,410 Deferred Federal 23,507 62,893 8,307 State 1,562 460 (807 ) Foreign (1,430 ) 28 (386 ) Total deferred 23,639 63,381 7,114 Total provision $ 95,563 $ 192,894 $ 166,524 |
Schedule of Reconciliation of Income Taxes at Federal Statutory Corporate Rate to Effective Rate | A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows: Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) Federal income taxes at the statutory rate 21.0 % 33.9 % 35.0 % Re-measurement of deferred tax assets and liabilities (2.2 %) 6.7 % — Transition tax (0.6 %) 2.9 % — State income tax rate 3.8 % 2.5 % 3.5 % Change in uncertain tax positions 4.1 % (1.6 %) 2.8 % Rate differential (2.3 %) (2.9 %) (5.7 %) Research and development credits (2.1 %) — — Other 0.6 % 1.1 % (0.3 %) Effective tax rate 22.3 % 42.6 % 35.3 % |
Schedule of Components of Deferred Income Tax Accounts | Significant components of our deferred income tax accounts are as follows: Deferred tax assets (liabilities), in thousands Feb. 3, 2019 Jan. 28, 2018 Deferred rent $ 18,942 $ 18,387 Merchandise inventories 18,703 23,314 Customer deposits 14,345 23,601 Stock-based compensation 14,281 9,024 Accrued liabilities 13,470 13,626 Compensation 11,251 14,127 State taxes 7,435 5,099 Executive deferred compensation 5,739 5,886 Federal and state net operating loss 4,223 6,026 Depreciation (31,557 ) (17,361 ) Deferred lease incentives (26,032 ) (24,854 ) Other (4,797 ) (3,116 ) Valuation allowance (3,542 ) (1,067 ) Prepaid catalog expenses (936 ) (5,386 ) Total deferred income tax assets, net $ 41,525 $ 67,306 |
Summary of Activity Related to Gross Unrecognized Tax Benefits | The following table summarizes the activity related to our gross unrecognized tax benefits: In thousands Fiscal 2018 Fiscal 2017 Fiscal 2016 Balance at beginning of year $ 18,051 $ 25,864 $ 13,290 Increases related to current year’s tax positions 4,694 3,345 11,772 Increases related to prior years’ tax positions 14,905 808 3,456 Decreases related to prior years’ tax positions (1,279 ) (10,610 ) (818 ) Lapses in statute of limitations (786 ) (1,356 ) (1,122 ) Settlements (376 ) — (714 ) Balance at end of year $ 35,209 $ 18,051 $ 25,864 |
Accounting for Leases (Tables)
Accounting for Leases (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Schedule of Total Rent Expense for All Operating Leases | Total rent expense for all operating leases was as follows: In thousands Fiscal 2018 (53 Weeks) Fiscal 2017 (52 Weeks) Fiscal 2016 (52 Weeks) Rent expense $ 271,522 $ 263,409 $ 251,066 Contingent rent expense 26,414 24,918 26,980 Rent expense before deferred lease incentive income 297,936 288,327 278,046 Deferred lease incentive income (26,189 ) (25,293 ) (25,298 ) Less: sublease rental income (522 ) (578 ) (558 ) Total rent expense 1 $ 271,225 $ 262,456 $ 252,190 1 Excludes all other occupancy-related costs including depreciation, common area maintenance, property taxes and utilities. |
Schedule of Aggregate Future Minimum Annual Cash Rental Payments Under Non-Cancellable Operating Leases | The aggregate future minimum annual cash rental payments under non-cancellable operating leases in effect at February 3, 2019 were as follows: In thousands Lease Commitments 1 Fiscal 2019 $ 292,387 Fiscal 2020 262,429 Fiscal 2021 225,755 Fiscal 2022 190,263 Fiscal 2023 160,308 Thereafter 559,802 Total $ 1,690,944 1 Projected cash payments include only those amounts that are fixed and determinable as of the reporting date and are not necessarily representative of future expected rent expense. We currently pay rent for certain store locations based on a percentage of store sales. As future store sales cannot be predicted with certainty, projected payments for these locations are based on minimum rent, which is generally higher than rent based on a percentage of store sales. We incur other lease obligation expenses, such as common area maintenance and other executory costs, which are not fixed in nature and are thus not included in the future projected cash payments reflected above. In addition, projected cash payments do not include any benefit from deferred lease incentive income, which is reflected within “Total rent expense” above. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Reconciliation of Net Earnings and Number of Shares Used In Basic and Diluted Earnings per Share Computations | The following is a reconciliation of net earnings and the number of shares used in the basic and diluted earnings per share computations: In thousands, except per share amounts Net Earnings Weighted Average Shares Earnings Per Share Fiscal 2018 (53 Weeks) Basic $ 333,684 81,420 $ 4.10 Effect of dilutive stock-based awards 920 Diluted $ 333,684 82,340 $ 4.05 Fiscal 2017 (52 Weeks) Basic $ 259,545 85,592 $ 3.03 Effect of dilutive stock-based awards 488 Diluted $ 259,545 86,080 $ 3.02 Fiscal 2016 (52 Weeks) Basic $ 305,387 88,594 $ 3.45 Effect of dilutive stock-based awards 868 Diluted $ 305,387 89,462 $ 3.41 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Summary of Stock-Settled Stock Appreciation Rights Activity | The following table summarizes our stock-settled stock appreciation right activity during fiscal 2018: Shares Weighted Average Conversion Price 1 Balance at January 28, 2018 (100% vested) 167,737 $ 30.91 Granted — — Converted into common stock (166,447 ) 30.83 Cancelled (1,290 ) 40.87 Balance at February 3, 2019 — $ — 1 Conversion price is equal to the market value on the date of grant. |
Summary of Restricted Stock Units Activity | The following table summarizes our restricted stock unit activity during fiscal 2018: Shares Weighted Average Grant Date Fair Value Weighted Average Contractual Term Remaining (Years) Intrinsic Value 1 Balance at January 28, 2018 2,358,137 $ 58.18 Granted 1,432,954 49.72 Granted, with vesting subject to performance conditions 256,350 48.76 Released (677,251 ) 59.47 Cancelled (357,267 ) 60.48 Balance at February 3, 2019 3,012,923 $ 52.88 3.03 $ 162,698,000 Vested plus expected to vest at February 3, 2019 2,389,343 $ 52.74 3.10 $ 129,025,000 1 Intrinsic value for outstanding and unvested restricted stock units is based on the market value of our common stock on the last business day of the fiscal year (or $54.00). |
Summary of Additional Information About Restricted Stock Units | The following table summarizes additional information about restricted stock units: Fiscal 2018 Fiscal 2017 Fiscal 2016 Weighted average grant date fair value per share of awards granted $ 49.57 $ 52.76 $ 59.17 Intrinsic value of awards released 1 $ 34,213,000 $ 35,508,000 $ 56,405,000 1 Intrinsic value for releases is based on the market value on the date of release. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Segment Information | Segment Information In thousands E-commerce Retail Unallocated Total Fiscal 2018 (53 Weeks) Net revenues 1 $ 3,082,064 $ 2,589,529 $ — $ 5,671,593 Depreciation and amortization expense 36,294 89,419 63,095 188,808 Operating income (loss) 2 643,592 217,070 (424,709 ) 435,953 Assets 3 914,452 1,183,604 714,788 2,812,844 Capital expenditures 45,151 82,840 62,111 190,102 Fiscal 2017 (52 Weeks) Net revenues 1 $ 2,778,457 $ 2,513,902 $ — $ 5,292,359 Depreciation and amortization expense 28,977 90,625 63,475 183,077 Operating income (loss) 4 599,491 224,608 (370,288 ) 453,811 Assets 3 776,569 1,114,726 894,454 2,785,749 Capital expenditures 39,273 83,750 66,689 189,712 Fiscal 2016 (52 Weeks) Net revenues 1 $ 2,633,602 $ 2,450,210 $ — $ 5,083,812 Depreciation and amortization expense 31,135 86,228 55,832 173,195 Operating income (loss) 4 606,286 231,929 (365,616 ) 472,599 Assets 3 614,213 1,077,593 785,073 2,476,879 Capital expenditures 21,479 102,859 73,076 197,414 1 Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $ 346.8 million, $ 328.2 million and $ 321.2 million in fiscal 2018, fiscal 2017 and fiscal 2016 respectfully. 2 The 53 weeks ended February 3, 2019 includes approximately $25.2 million of expense related to our acquisition of Outward (primarily acquisition-related compensation costs, the amortization of intangible assets acquired, and the operations of the Outward business), of which $19.6 million is recorded in the e-commerce segment and $5.5 million is recorded in the unallocated segment; $13.2 million of expense related to impairment and early lease termination charges which is primarily recorded in the retail segment; and $8.0 million of employment-related expense primarily associated with an equity grant, which is recorded within the unallocated segment. 3 Includes long-term assets related to our international operations of approximately $ 50.3 million, $ 63.4 million and $ 59.2 million in fiscal 2018, fiscal 2017 and fiscal 2016. 4 The 52 weeks ended January 28, 2018 includes approximately $ 8.6 million for severance-related charges, primarily in our corporate functions, which is recorded within the unallocated segment and approximately $6.2 million for costs related to the acquisition of Outward and its ongoing operations, of which $3.3 million is recorded in the e-commerce segment and $2.9 million is recorded in the unallocated segment. The 52 weeks ended January 29, 2017 includes $ 14.4 million for severance-related reorganization charges, primarily in our corporate functions, which is recorded within the unallocated segment. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Foreign Currency Forward Contracts Outstanding with Notional Values | As of February 3, 2019, and January 28, 2018, we had foreign currency forward contracts outstanding (in U.S. dollars) with notional values as follows: In thousands Feb. 3, 2019 Jan. 28, 2018 Contracts designated as cash flow hedges $ 16,600 $ 28,200 Contracts not designated as cash flow hedges $ 5,300 $ 46,000 |
Effect of Derivative Instruments in Consolidated Financial Statements | The effect of derivative instruments in our Consolidated Financial Statements, pre-tax, was as follows: In thousands Fiscal 2018 Fiscal 2017 Fiscal 2016 Net gain (loss) recognized in OCI $ 1,488 $ (974 ) $ (1,243 ) Net gain (loss) reclassified from OCI to cost of goods sold $ 478 $ (144 ) $ (147 ) Net foreign exchange gain (loss) recognized in selling, general and administrative expenses: Instruments designated as cash flow hedges 1 $ 57 $ 88 $ (4 ) Instruments not designated or de-designated $ 3,967 $ (3,286 ) $ (3,569 ) 1 Changes in fair value of the forward contract related to interest charges (or forward points). |
Fair Values of Derivative Instruments | The fair values of our derivative financial instruments are presented below according to their classification in our Consolidated Balance Sheets. All fair values were measured using Level 2 inputs as defined by the fair value hierarchy described in Note M. In thousands Feb. 3, 2019 Jan. 28, 2018 Derivatives designated as cash flow hedges: Other current assets $ 358 $ — Other current liabilities $ — $ (635 ) Other long-term liabilities $ — $ (54 ) Derivatives not designated as hedging instruments: Other current assets $ 4 $ — Other current liabilities $ — $ (299 ) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (loss) (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | Changes in accumulated other comprehensive income (loss) by component, net of tax, are as follows: In thousands Foreign Currency Translation Cash Flow Hedges Accumulated Other Comprehensive Income (Loss) Balance at January 31, 2016 $ (11,480 ) $ 864 $ (10,616 ) Foreign currency translation adjustments 1,523 — 1,523 Change in fair value of derivative financial instruments — (916 ) (916 ) Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — 106 106 Other comprehensive income (loss) 1,523 (810 ) 713 Balance at January 29, 2017 (9,957 ) 54 (9,903 ) Foreign currency translation adjustments 3,730 — 3,730 Change in fair value of derivative financial instruments — (715 ) (715 ) Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — 106 106 Other comprehensive income (loss) 3,730 (609 ) 3,121 Balance at January 28, 2018 (6,227 ) (555 ) (6,782 ) Foreign currency translation adjustments (5,032 ) — (5,032 ) Change in fair value of derivative financial instruments — 1,098 1,098 Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — (357 ) (357 ) Other comprehensive income (loss) (5,032 ) 741 (4,291 ) Balance at February 3, 2019 $ (11,259 ) $ 186 $ (11,073 ) 1 Refer to Note L for additional disclosures about reclassifications out of accumulated other comprehensive income and their corresponding effects on the respective line items in the Consolidated Statements of Earnings. |
Acquisition of Outward, Inc. (T
Acquisition of Outward, Inc. (Tables) | 12 Months Ended |
Feb. 03, 2019 | |
Summary of Fair Value of Identifiable Assets Acquired and Liabilities Asssumed | The purchase consideration has been allocated based on estimates of the fair value of identifiable assets acquired and liabilities assumed, as set forth in the table below. In thousands Working capital and other assets $ 718,000 Property and equipment, net 2,049,000 Intangible assets 18,300,000 Liabilities (6,886,000 ) Total identifiable net assets acquired $ 14,181,000 Goodwill 66,631,000 Total purchase consideration $ 80,812,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | ||||
Apr. 29, 2018USD ($) | Feb. 03, 2019USD ($)Store | Jan. 28, 2018USD ($) | Jan. 29, 2017USD ($) | Jan. 29, 2016USD ($) | Jan. 29, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of stores | Store | 625 | |||||
Inventory obsolescence reserves | $ 13,580,000 | $ 12,649,000 | ||||
Advertising expenses | 390,115,000 | $ 382,206,000 | $ 347,474,000 | |||
Asset impairment charges | 13,200,000 | 1,765,000 | ||||
Goodwill | 85,382,000 | 18,838,000 | ||||
Goodwill impairment | 0 | 0 | 0 | |||
Self-insurance reserves | $ 28,542,000 | 26,370,000 | ||||
Period of recognition for stored-value card | 4 years | |||||
Balance at beginning of year | $ 11,842,000 | 16,058,000 | 19,113,000 | |||
Provision for sales returns | 302,320,000 | 303,694,000 | ||||
Actual sales returns | 306,536,000 | 306,749,000 | ||||
Balance at end of year | $ 11,842,000 | $ 16,058,000 | ||||
Gift card and other deferred revenue | $ 298,435,000 | |||||
Other Current Liabilities [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Liability for Expected Sales Returns | 26,276,000 | |||||
Other Current Assets [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Merchandise Inventory to be Returned | $ 10,030,000 | |||||
Accounting Standards Update 2016-02 [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Increase in total long-term assets and total liabilities | $ 1,200,000,000 | |||||
increase in liabilities for lease obligations | 1,400,000,000 | |||||
Deferred Rent Receivables Net | 200,000,000 | |||||
Operating Lease Right Of Use Asset | $ 1,200,000,000 | |||||
Retained Earnings | Adjustments for New Accounting Pronouncement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cumulative effect of net pre-tax increase to retained earnings | $ 17,862,000 |
Estimated Useful Lives of Prope
Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Feb. 03, 2019 | |
Leasehold Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 5 years |
Leasehold Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 22 years |
Fixtures and Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 2 years |
Fixtures and Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 20 years |
Buildings and Building Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 10 years |
Buildings and Building Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 40 years |
Capitalized Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 2 years |
Capitalized Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life of assets, years | 10 years |
Summarize Impact of Adopting AS
Summarize Impact of Adopting ASU 2014-09 to Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Net revenue | [1] | $ 5,671,593 | $ 5,292,359 | $ 5,083,812 | |||
Cost of goods sold | 3,570,580 | 3,360,648 | 3,200,502 | ||||
Gross profit | 2,101,013 | 1,931,711 | 1,883,310 | ||||
Selling, general and administrative expenses | 1,665,060 | 1,477,900 | 1,410,711 | ||||
Operating income | 435,953 | [2] | $ 453,811 | [3] | $ 472,599 | [3] | |
Accounting Standards Update 2014-09 [Member] | ASU 2014-09 Adjustment | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Net revenue | (61,106) | ||||||
Cost of goods sold | (6,059) | ||||||
Gross profit | (55,047) | ||||||
Selling, general and administrative expenses | (48,766) | ||||||
Operating income | (6,281) | ||||||
Accounting Standards Update 2014-09 [Member] | As Adjusted | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Net revenue | 5,610,487 | ||||||
Cost of goods sold | 3,564,521 | ||||||
Gross profit | 2,045,966 | ||||||
Selling, general and administrative expenses | 1,616,294 | ||||||
Operating income | $ 429,672 | ||||||
[1] | Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $346.8 million, $328.2 million and $321.2 million in fiscal 2018, fiscal 2017 and fiscal 2016 respectfully. | ||||||
[2] | The 53 weeks ended February 3, 2019 includes approximately $25.2 million of expense related to our acquisition of Outward (primarily acquisition-related compensation costs, the amortization of intangible assets acquired, and the operations of the Outward business), of which $19.6 million is recorded in the e-commerce segment and $5.5 million is recorded in the unallocated segment; $13.2 million of expense related to impairment and early lease termination charges which is primarily recorded in the retail segment; and $8.0 million of employment-related expense primarily associated with an equity grant, which is recorded within the unallocated segment. | ||||||
[3] | The 52 weeks ended January 28, 2018 includes approximately $8.6 million for severance-related charges, primarily in our corporate functions, which is recorded within the unallocated segment and approximately $6.2 million for costs related to the acquisition of Outward and its ongoing operations, of which $3.3 million is recorded in the e-commerce segment and $2.9 million is recorded in the unallocated segment. The 52 weeks ended January 29, 2017 includes $14.4 million for severance-related reorganization charges, primarily in our corporate functions, which is recorded within the unallocated segment. |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Feb. 03, 2019 | Jan. 28, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 2,742,402 | $ 2,619,112 | |
Accumulated depreciation | (1,812,767) | (1,686,829) | |
Property and equipment, net | 929,635 | 932,283 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 950,259 | 950,024 | |
Fixtures and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 836,400 | 800,003 | |
Capitalized Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 733,941 | 621,730 | |
Land and Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 175,181 | 173,457 | |
Corporate Systems Projects in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 39,416 | 65,283 | |
Construction in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | [1] | $ 7,205 | $ 8,615 |
[1] | Construction in progress primarily consists of leasehold improvements and furniture and fixtures related to new, expanded or remodeled retail stores where construction had not been completed as of year-end. |
Borrowing Arrangements - Additi
Borrowing Arrangements - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Feb. 03, 2019 | Jan. 28, 2018 | |
Debt Instrument [Line Items] | ||
Amount of borrowings under revolving line during period | $ 60,000,000 | $ 170,000,000 |
Amount outstanding under revolving line | $ 0 | $ 0 |
Interest rate description | Interest on unreimbursed amounts under the letter of credit facilities accrues at a base rate as defined in the credit facility, plus an applicable margin based on our leverage ratio. | |
Maximum borrowing capacity under letter of credit facilities including additional borrowing capacity | $ 70,000,000 | |
Letter of credit facilities, maturity date | Aug. 24, 2019 | |
Outstanding letter of credit facilities | $ 6,820,000 | |
Latest expiration date possible for future letters of credit | Jan. 21, 2020 | |
Standby Letters of Credit | ||
Debt Instrument [Line Items] | ||
Amount issued but undrawn under credit facility | $ 11,732,000 | |
Unsecured Revolving Line Of Credit | ||
Debt Instrument [Line Items] | ||
Current borrowing capacity | 500,000,000 | |
Maximum borrowing capacity including additional borrowing capacity | $ 250,000,000 | |
Revolving line, maturity date | Jan. 8, 2023 | |
Weighted average interest rate | 3.20% | 2.21% |
Interest rate description | The interest rate under the credit facility is variable, and may be elected by us as: (i) the London Interbank Offer Rate ("LIBO") plus an applicable margin based on our leverage ratio ranging from 0.91% to 1.775% for a revolver borrowing, and 1.0% to 2.0% for the term loan; or (ii) a base rate as defined in the credit facility, plus an applicable margin ranging from 0% to 0.775% for a revolver borrowing, and 0% to 1.0% for the term loan. | |
Unsecured Revolving Line Of Credit | Maximum | ||
Debt Instrument [Line Items] | ||
Additional borrowing capacity | $ 750,000,000 | |
Unsecured Revolving Line Of Credit | Margin Based On Leverage Ratio | Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 1.775% | |
Unsecured Revolving Line Of Credit | Margin Based On Leverage Ratio | Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 0.91% | |
Unsecured Revolving Line Of Credit | Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 0.775% | |
Unsecured Revolving Line Of Credit | Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 0.00% | |
Unsecured Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 300,000,000 | |
Long term debt | $ 300,000,000 | |
Debt instrument, maturity date | Jan. 8, 2021 | |
Weighted average interest rate | 3.21% | |
Unsecured Term Loan Facility | Margin Based On Leverage Ratio | Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 2.00% | |
Unsecured Term Loan Facility | Margin Based On Leverage Ratio | Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 1.00% | |
Unsecured Term Loan Facility | Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 1.00% | |
Unsecured Term Loan Facility | Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 0.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Income Taxes [Line Items] | ||||
Federal income taxes at the statutory rate | 21.00% | 33.90% | 35.00% | |
Re-measurement of deferred tax assets | $ 10,576,000 | |||
Deferred tax assets valuation allowance | 3,542,000 | $ 1,067,000 | ||
Unrecognized tax benefits, gross | 35,209,000 | 18,051,000 | $ 25,864,000 | $ 13,290,000 |
Unrecognized tax benefits, gross, that would, if recognized, affect the effective tax rate | 31,209,000 | |||
Accruals for interest and penalties | 5,437,000 | 3,719,000 | ||
Foreign withholding tax and additional state income tax | 1,493,000 | |||
Outward Inc. | ||||
Income Taxes [Line Items] | ||||
Net operating loss carry-forwards, federal | 4,979,000 | |||
Net operating loss carry-forwards, state | 7,102,000 | |||
Deferred tax assets valuation allowance | $ 0 | |||
Minimum | ||||
Income Taxes [Line Items] | ||||
Gross unrecognized tax benefits, possible decrease in balance within next twelve months | 0 | |||
Maximum | ||||
Income Taxes [Line Items] | ||||
Gross unrecognized tax benefits, possible decrease in balance within next twelve months | $ 10,800,000 |
Components of Earnings Before I
Components of Earnings Before Income Taxes, by Tax Jurisdiction (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Schedule of Income Before Income Tax [Line Items] | |||
United States | $ 333,594 | $ 379,000 | $ 425,517 |
Foreign | 95,653 | 73,439 | 46,394 |
Earnings before income taxes | $ 429,247 | $ 452,439 | $ 471,911 |
Components Of Provision For Inc
Components Of Provision For Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Provision For Income Taxes [Line Items] | |||
Federal, Current | $ 43,745 | $ 97,202 | $ 125,760 |
State, Current | 15,357 | 19,552 | 26,197 |
Foreign, Current | 12,822 | 12,759 | 7,453 |
Total current | 71,924 | 129,513 | 159,410 |
Federal, Deferred | 23,507 | 62,893 | 8,307 |
State, Deferred | 1,562 | 460 | (807) |
Foreign, Deferred | (1,430) | 28 | (386) |
Total deferred | 23,639 | 63,381 | 7,114 |
Total provision | $ 95,563 | $ 192,894 | $ 166,524 |
Reconciliation of Income Taxes
Reconciliation of Income Taxes At Federal Statutory Rate to Effective Rate (Detail) | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Reconciliation of Statutory Federal Tax Rate [Line Items] | |||
Federal income taxes at the statutory rate | 21.00% | 33.90% | 35.00% |
Re-measurement of deferred tax assets / liabilities | (2.20%) | 6.70% | |
Transition tax | (0.60%) | 2.90% | |
State income tax rate | 3.80% | 2.50% | 3.50% |
Change in uncertain tax positions | 4.10% | (1.60%) | 2.80% |
Rate differential | (2.30%) | (2.90%) | (5.70%) |
Research and development credits | (2.10%) | ||
Other | 0.60% | 1.10% | (0.30%) |
Effective tax rate | 22.30% | 42.60% | 35.30% |
Significant Components of Defer
Significant Components of Deferred Income Tax Accounts (Detail) - USD ($) $ in Thousands | Feb. 03, 2019 | Jan. 28, 2018 |
Deferred Income Tax Asset [Line Items] | ||
Deferred rent | $ 18,942 | $ 18,387 |
Merchandise inventories | 18,703 | 23,314 |
Customer deposits | 14,345 | 23,601 |
Stock-based compensation | 14,281 | 9,024 |
Accrued liabilities | 13,470 | 13,626 |
Compensation | 11,251 | 14,127 |
State taxes | 7,435 | 5,099 |
Executive deferred compensation | 5,739 | 5,886 |
Federal and state net operating loss | 4,223 | 6,026 |
Depreciation | (31,557) | (17,361) |
Deferred lease incentives | (26,032) | (24,854) |
Other | (4,797) | (3,116) |
Valuation allowance | (3,542) | (1,067) |
Prepaid catalog expenses | (936) | (5,386) |
Total deferred income tax assets, net | $ 41,525 | $ 67,306 |
Summary of Activity Related to
Summary of Activity Related to Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Schedule of Unrecognized Tax Benefits [Line Items] | |||
Balance at beginning of year | $ 18,051 | $ 25,864 | $ 13,290 |
Increases related to current year's tax positions | 4,694 | 3,345 | 11,772 |
Increases related to prior years' tax positions | 14,905 | 808 | 3,456 |
Decreases related to prior years' tax positions | (1,279) | (10,610) | (818) |
Lapses in statute of limitations | (786) | (1,356) | (1,122) |
Settlements | (376) | (714) | |
Balance at end of year | $ 35,209 | $ 18,051 | $ 25,864 |
Accounting for Leases - Additio
Accounting for Leases - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 03, 2019 | Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | ||
Accounting For Leases [Line Items] | |||||
Maximum optional renewal period under operating leases, years | 20 years | ||||
Rent expense | [1] | $ 271,225,000 | $ 262,456,000 | $ 252,190,000 | |
Partnership | |||||
Accounting For Leases [Line Items] | |||||
Lease expiration date | Jul. 31, 2017 | ||||
Rent expense | $ 1,689,000 | $ 1,629,000 | $ 1,599,000 | ||
Extension period | 1 year | ||||
Operating lease term extended expiry date | Jul. 31, 2018 | ||||
Partnership | Amendment | |||||
Accounting For Leases [Line Items] | |||||
Operating lease term extended expiry date | Jul. 31, 2020 | ||||
Renewal options period | 1 year | 1 year | |||
Minimum | |||||
Accounting For Leases [Line Items] | |||||
Operating lease term, years | 5 years | ||||
Maximum | |||||
Accounting For Leases [Line Items] | |||||
Operating lease term, years | 22 years | ||||
[1] | Excludes all other occupancy-related costs including depreciation, common area maintenance, property taxes and utilities. |
Total Rent Expense for All Oper
Total Rent Expense for All Operating Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | ||
Accounting For Leases [Line Items] | ||||
Rent expense | $ 271,522 | $ 263,409 | $ 251,066 | |
Contingent rent expense | 26,414 | 24,918 | 26,980 | |
Rent expense before deferred lease incentive income | 297,936 | 288,327 | 278,046 | |
Deferred lease incentive income | (26,189) | (25,293) | (25,298) | |
Less: sublease rental income | (522) | (578) | (558) | |
Total rent expense | [1] | $ 271,225 | $ 262,456 | $ 252,190 |
[1] | Excludes all other occupancy-related costs including depreciation, common area maintenance, property taxes and utilities. |
Aggregate Future Minimum Annual
Aggregate Future Minimum Annual Cash Rental Payments Under Non-Cancellable Operating Leases (Detail) $ in Thousands | Feb. 03, 2019USD ($) | [1] |
Accounting For Leases [Line Items] | ||
Lease Commitments, Fiscal 2019 | $ 292,387 | |
Lease Commitments, Fiscal 2020 | 262,429 | |
Lease Commitments, Fiscal 2021 | 225,755 | |
Lease Commitments, Fiscal 2022 | 190,263 | |
Lease Commitments, Fiscal 2023 | 160,308 | |
Lease Commitments, Thereafter | 559,802 | |
Total | $ 1,690,944 | |
[1] | Projected cash payments include only those amounts that are fixed and determinable as of the reporting date and are not necessarily representative of future expected rent expense. We currently pay rent for certain store locations based on a percentage of store sales. As future store sales cannot be predicted with certainty, projected payments for these locations are based on minimum rent, which is generally higher than rent based on a percentage of store sales. We incur other lease obligation expenses, such as common area maintenance and other executory costs, which are not fixed in nature and are thus not included in the future projected cash payments reflected above. In addition, projected cash payments do not include any benefit from deferred lease incentive income, which is reflected within “Total rent expense” above. |
Reconciliation of Net Earnings
Reconciliation of Net Earnings and Number of Shares Used in Basic and Diluted Earnings Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Earnings Per Share [Line Items] | |||
Net Earnings, Basic | $ 333,684 | $ 259,545 | $ 305,387 |
Net Earnings, Diluted | $ 333,684 | $ 259,545 | $ 305,387 |
Weighted Average Shares, Basic | 81,420 | 85,592 | 88,594 |
Weighted Average Shares, Effect of dilutive stock-based awards | 920 | 488 | 868 |
Weighted Average Shares, Diluted | 82,340 | 86,080 | 89,462 |
Earnings Per Share, Basic | $ 4.10 | $ 3.03 | $ 3.45 |
Earnings Per Share, Diluted | $ 4.05 | $ 3.02 | $ 3.41 |
Earnings Per Share- Additional
Earnings Per Share- Additional Information (Detail) - shares | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Earnings Per Share [Line Items] | |||
Anti-dilutive stock-based awards excluded from the computation of diluted earnings per share | 31,000 | 577,000 | 261,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum term of grants of option awards, years | 7 years | ||
Stock-based compensation expense | $ 59,802,000 | $ 42,988,000 | $ 51,116,000 |
Unamortized expense | $ 78,694,000 | ||
Unamortized expense expected to be recognized over average remaining service period (years) | 2 years | ||
Intrinsic value of awards converted into common stock | $ 4,394,000 | 7,287,000 | 5,237,000 |
Net proceeds related to stock-based awards | 0 | 0 | 1,532,000 |
Total current tax benefit associated with the exercise of stock-based awards | $ 9,927,000 | $ 16,066,000 | $ 24,129,000 |
Minimum | Non-Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of awards granted to employees, years | 1 year | ||
Equity Award Programs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate number of shares under the Plan | 36,570,000 | ||
Shares available for future grant | 7,436,000 | ||
Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards annual grant limit | 1,000,000 | ||
Option Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price as a percentage of closing price on the day prior to the grant date | 100.00% | ||
Service Based Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of awards granted to employees, years | 4 years | ||
Stock-Settled Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-settled stock appreciation granted, shares | 0 | 0 | |
Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards annual grant limit | 1,000,000 | ||
Maximum term of grants of stock awards, years | 7 years | ||
Service Based Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of awards granted to employees, years | 4 years | ||
Performance Based Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of awards granted to employees, years | 3 years |
Summary of Stock-Settled Stock
Summary of Stock-Settled Stock Appreciation Right Activity (Detail) - Stock-Settled Stock Appreciation Rights - $ / shares | 12 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Balance at January 28, 2018 (100% vested) | 167,737 | |||
Granted, shares | 0 | 0 | ||
Converted into common stock, shares | (166,447) | |||
Cancelled, shares | (1,290) | |||
Balance at February 3, 2019 (100% vested) | 167,737 | |||
Balance at January 28, 2018 (100% vested) | [1] | $ 30.91 | ||
Granted, weighted average conversion price | [1] | |||
Converted into common stock, weighted average conversion price | [1] | 30.83 | ||
Cancelled, weighted average conversion price | [1] | 40.87 | ||
Balance at February 3, 2018, shares (100% vested) | [1] | $ 30.91 | ||
[1] | Conversion price is equal to the market value on the date of grant. |
Summary of Stock-Settled Stoc_2
Summary of Stock-Settled Stock Appreciation Right Activity (Parenthetical) (Detail) | 12 Months Ended |
Feb. 03, 2019 | |
Stock-Settled Stock Appreciation Rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vested percentage | 100.00% |
Summary of Restricted Stock Uni
Summary of Restricted Stock Unit Activity (Detail) - USD ($) | 12 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, weighted average grant date fair value | $ 49.57 | $ 52.76 | $ 59.17 | |
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Balance at January 28, 2018, shares | 2,358,137 | |||
Granted, shares | 1,432,954 | |||
Granted, with vesting subject to performance conditions, shares | 256,350 | |||
Released, shares | (677,251) | |||
Cancelled, shares | (357,267) | |||
Balance at February 3, 2019, shares | 3,012,923 | 2,358,137 | ||
Vested plus expected to vest at January 28, 2018 shares | 2,389,343 | |||
Balance at January 28, 2018, weighted average grant date fair value | $ 58.18 | |||
Granted, weighted average grant date fair value | 49.72 | |||
Granted, with vesting subject to performance conditions, weighted average grant date fair value | 48.76 | |||
Released, weighted average grant date fair value | 59.47 | |||
Cancelled, weighted average grant date fair value | 60.48 | |||
Balance at February 3, 2019, weighted average grant date fair value | 52.88 | $ 58.18 | ||
Vested plus expected to vest at February 3, 2019, weighted average grant date fair value | $ 52.74 | |||
Weighted average contractual term remaining (years) | 3 years 11 days | |||
Vested plus expected to vest at February 3, 2018, weighted average contractual term remaining (years) | 3 years 1 month 6 days | |||
Balance at February 3, 2019 | [1] | $ 162,698,000 | ||
Vested plus expected to vest at February 3, 2019 | [1] | $ 129,025,000 | ||
[1] | Intrinsic value for outstanding and unvested restricted stock units is based on the market value of our common stock on the last business day of the fiscal year (or $0). |
Summary of Restricted Stock U_2
Summary of Restricted Stock Unit Activity (Parenthetical) (Detail) | Feb. 03, 2019$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Market value on the last business day of the fiscal year | $ 54 |
Summary of Additional Informati
Summary of Additional Information about Restricted Stock units (Detail) - USD ($) | 12 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value per share of awards granted | $ 49.57 | $ 52.76 | $ 59.17 | |
Intrinsic value of awards released | [1] | $ 34,213,000 | $ 35,508,000 | $ 56,405,000 |
[1] | Intrinsic value for releases is based on the market value on the date of release. |
Williams-Sonoma, Inc. 401(k) _2
Williams-Sonoma, Inc. 401(k) Plan and Other Employee Benefits - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution | 50.00% | ||
Defined contribution retirement plan, maximum percentage of salary deferral contributions subject to match by employer | 6.00% | ||
Years of service required to be eligible for company matching contributions | 1 year | ||
Matching contribution, vesting percentage per year during first five years of employment | 20.00% | ||
Contributions to the profit sharing plan | $ 9,036,000 | $ 8,224,000 | $ 7,725,000 |
Deferred compensation liabilities included in other long-term obligations | 23,319,000 | 24,151,000 | |
Cash surrender value of the life insurance policies | $ 25,390,000 | $ 25,550,000 | |
Eligible Employees | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution retirement plan, maximum percentage of salary deferral contributions by employee | 75.00% | ||
Highly-Compensated Employees | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution retirement plan, maximum percentage of salary deferral contributions by employee | 7.00% |
Stock Repurchase Program and _2
Stock Repurchase Program and Dividends - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | Mar. 31, 2019 | |
Stock Repurchase Program and Dividend [Line Items] | |||||
Common stock repurchased, shares | 5,373,047 | 4,050,697 | 2,871,480 | ||
Common stock repurchased, average cost per share | $ 54.96 | $ 48.43 | $ 52.68 | ||
Common stock repurchased, total cost | $ 295,304,000 | $ 196,179,000 | $ 151,272,000 | ||
Stock repurchase program, remaining authorized repurchase amount | 223,815,000 | ||||
Stock repurchase program, authorized shares | $ 500,000,000 | ||||
Treasure stock, value | 235,000 | $ 725,000 | |||
Percentage increase in authorized cash dividend | 11.60% | ||||
Cash dividend, per common share | $ 0.43 | ||||
Authorized cash dividend, per common share | $ 0.48 | ||||
Cash dividend declared | $ 144,609,000 | $ 135,779,000 | $ 133,588,000 | ||
Cash dividends declared per common share | $ 1.72 | $ 1.56 | $ 1.48 | ||
Dividend Declared [Member] | |||||
Stock Repurchase Program and Dividend [Line Items] | |||||
Dividend for common share | $ 0.05 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 12 Months Ended |
Feb. 03, 2019Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |||||
Segment Reporting Information [Line Items] | |||||||
Net revenues | [1] | $ 5,671,593 | $ 5,292,359 | $ 5,083,812 | |||
Depreciation and amortization expense | 188,808 | 183,077 | 173,195 | ||||
Operating income (loss) | 435,953 | [2] | 453,811 | [3] | 472,599 | [3] | |
Assets | [4] | 2,812,844 | 2,785,749 | 2,476,879 | |||
Capital expenditures | 190,102 | 189,712 | 197,414 | ||||
E-commerce | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenues | 3,082,064 | 2,778,457 | 2,633,602 | ||||
Retail | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenues | 2,589,529 | 2,513,902 | 2,450,210 | ||||
Operating Segments | E-commerce | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenues | [1] | 3,082,064 | 2,778,457 | 2,633,602 | |||
Depreciation and amortization expense | 36,294 | 28,977 | 31,135 | ||||
Operating income (loss) | 643,592 | [2] | 599,491 | [3] | 606,286 | [3] | |
Assets | [4] | 914,452 | 776,569 | 614,213 | |||
Capital expenditures | 45,151 | 39,273 | 21,479 | ||||
Operating Segments | Retail | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenues | [1] | 2,589,529 | 2,513,902 | 2,450,210 | |||
Depreciation and amortization expense | 89,419 | 90,625 | 86,228 | ||||
Operating income (loss) | 217,070 | [2] | 224,608 | [3] | 231,929 | [3] | |
Assets | [4] | 1,183,604 | 1,114,726 | 1,077,593 | |||
Capital expenditures | 82,840 | 83,750 | 102,859 | ||||
Unallocated | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenues | [1] | 0 | 0 | 0 | |||
Depreciation and amortization expense | 63,095 | 63,475 | 55,832 | ||||
Operating income (loss) | (424,709) | [2] | (370,288) | [3] | (365,616) | [3] | |
Assets | [4] | 714,788 | 894,454 | 785,073 | |||
Capital expenditures | $ 62,111 | $ 66,689 | $ 73,076 | ||||
[1] | Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $346.8 million, $328.2 million and $321.2 million in fiscal 2018, fiscal 2017 and fiscal 2016 respectfully. | ||||||
[2] | The 53 weeks ended February 3, 2019 includes approximately $25.2 million of expense related to our acquisition of Outward (primarily acquisition-related compensation costs, the amortization of intangible assets acquired, and the operations of the Outward business), of which $19.6 million is recorded in the e-commerce segment and $5.5 million is recorded in the unallocated segment; $13.2 million of expense related to impairment and early lease termination charges which is primarily recorded in the retail segment; and $8.0 million of employment-related expense primarily associated with an equity grant, which is recorded within the unallocated segment. | ||||||
[3] | The 52 weeks ended January 28, 2018 includes approximately $8.6 million for severance-related charges, primarily in our corporate functions, which is recorded within the unallocated segment and approximately $6.2 million for costs related to the acquisition of Outward and its ongoing operations, of which $3.3 million is recorded in the e-commerce segment and $2.9 million is recorded in the unallocated segment. The 52 weeks ended January 29, 2017 includes $14.4 million for severance-related reorganization charges, primarily in our corporate functions, which is recorded within the unallocated segment. | ||||||
[4] | Includes long-term assets related to our international operations of approximately $50.3 million, $63.4 million and $59.2 million in fiscal 2018, fiscal 2017 and fiscal 2016. |
Segment Information (Parentheti
Segment Information (Parenthetical) (Detail) - USD ($) | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Segment Reporting Information [Line Items] | |||
Net revenues related to foreign operations | $ 346,800,000 | $ 328,200,000 | $ 321,200,000 |
Severance, related reorganization charges | 8,600,000 | ||
Long-term assets related to foreign operations | 50,300,000 | 63,400,000 | 59,200,000 |
Expense related to impairment and early lease termination charges | 13,200,000 | 1,765,000 | |
Unallocated | |||
Segment Reporting Information [Line Items] | |||
Severance, related reorganization charges | $ 14,400,000 | ||
Expense related to acquisition and other | 5,500,000 | ||
Employee related expense | 8,000,000 | ||
E-commerce | |||
Segment Reporting Information [Line Items] | |||
Expense related to acquisition and other | 19,600,000 | 3,300,000 | |
Outward Inc. | |||
Segment Reporting Information [Line Items] | |||
Expense related to acquisition and other | $ 25,200,000 | $ 6,200,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
Derivative [Line Items] | |||
Reclassification from OCI to cost of goods sold | $ 253,000 | ||
Gain or loss recognized for cash flow hedges due to hedge ineffectiveness | $ 0 | $ 0 | $ 0 |
Foreign Currency Forward Contra
Foreign Currency Forward Contracts Outstanding with Notional Values (Detail) - Foreign Exchange Contract - USD ($) $ in Thousands | Feb. 03, 2019 | Jan. 28, 2018 |
Not Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Exchange of foreign currency contracts | $ 5,300 | $ 46,000 |
Derivatives designated as hedging instruments | Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Exchange of foreign currency contracts | $ 16,600 | $ 28,200 |
Effect of Derivative Instrument
Effect of Derivative Instruments in Condensed Consolidated Financial Statements (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | ||
Derivative [Line Items] | ||||
Net gain (loss) recognized in OCI | $ 1,488 | $ (974) | $ (1,243) | |
Net gain (loss) reclassified from OCI into cost of goods sold | 478 | (144) | (147) | |
Net foreign exchange gain (loss) recognized in selling, general and administrative expenses, Instruments designated as cash flow hedges | [1] | 57 | 88 | (4) |
Net foreign exchange gain (loss) recognized in selling, general and administrative expenses, Instruments not designated or de-designated | $ 3,967 | $ (3,286) | $ (3,569) | |
[1] | Changes in fair value of the forward contract related to interest charges (or forward points). |
Fair Values of Derivative Instr
Fair Values of Derivative Instruments (Detail) - USD ($) $ in Thousands | Feb. 03, 2019 | Jan. 28, 2018 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives designated as cash flow hedges, Assets | $ 358 | |
Derivatives not designated as hedging instruments, Assets | $ 4 | |
Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives designated as cash flow hedges, Liabilities | $ (635) | |
Derivatives not designated as hedging instruments, Liabilities | (299) | |
Other Long Term Liabilites | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives designated as cash flow hedges, Liabilities | $ (54) |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | $ (6,782) | |||
Foreign currency translation adjustments | (5,032) | $ 3,730 | $ 1,523 | |
Change in fair value of derivative financial instruments | 1,098 | (715) | (916) | |
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | (357) | 106 | 106 | |
Ending Balance | (11,073) | (6,782) | ||
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (6,227) | (9,957) | (11,480) | |
Foreign currency translation adjustments | (5,032) | 3,730 | 1,523 | |
Change in fair value of derivative financial instruments | 0 | 0 | ||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | [1] | 0 | 0 | |
Other comprehensive income (loss) | (5,032) | 3,730 | 1,523 | |
Ending Balance | (11,259) | (6,227) | (9,957) | |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (555) | 54 | 864 | |
Foreign currency translation adjustments | 0 | 0 | ||
Change in fair value of derivative financial instruments | 1,098 | (715) | (916) | |
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | [1] | (357) | 106 | 106 |
Other comprehensive income (loss) | 741 | (609) | (810) | |
Ending Balance | 186 | (555) | 54 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (6,782) | (9,903) | (10,616) | |
Foreign currency translation adjustments | (5,032) | 3,730 | 1,523 | |
Change in fair value of derivative financial instruments | 1,098 | (715) | (916) | |
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | [1] | (357) | 106 | 106 |
Other comprehensive income (loss) | (4,291) | 3,121 | 713 | |
Ending Balance | $ (11,073) | $ (6,782) | $ (9,903) | |
[1] | Refer to Note L for additional disclosures about reclassifications out of accumulated other comprehensive income and their corresponding effects on the respective line items in the Consolidated Statements of Earnings. |
Acquisition of Outward, Inc. -
Acquisition of Outward, Inc. - Additional Information (Detail) - USD ($) | Dec. 01, 2017 | Jul. 29, 2018 | Feb. 03, 2019 | Jan. 28, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 85,382,000 | $ 18,838,000 | ||
E-commerce | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 55,215,000 | |||
Retail | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 11,416,000 | |||
Outward Inc. | ||||
Business Acquisition [Line Items] | ||||
Contractual purchase price | $ 112,000,000 | |||
Purchase consideration | 80,812,000 | |||
Consideration owed to former owners of an acquired business, contingent upon continued future service | $ 26,690,000 | |||
Acquisition payment period | 4 years | |||
Cash paid to settle pre-existing obligations as part of a business combination, excluded from consideration transferred | $ 4,498,000 | |||
Consideration owed to certain key employees of an acquired business, contingent upon continued future service and certain financial targets | $ 20,000,000 | |||
Goodwill | $ 66,631,000,000 | |||
Outward Inc. | 3-D Imaging Data and Intellectual Property | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible asset useful life | 4 years |
Summary of Fair Value of Identi
Summary of Fair Value of Identifiable Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Feb. 03, 2019 | Jan. 28, 2018 |
Business Acquisition [Line Items] | ||
Goodwill | $ 85,382 | $ 18,838 |
Outward Inc. | ||
Business Acquisition [Line Items] | ||
Working capital and other assets | 718,000 | |
Property and equipment, net | 2,049,000 | |
Intangible assets | 18,300,000 | |
Liabilities | (6,886,000) | |
Total identifiable net assets acquired | 14,181,000 | |
Goodwill | 66,631,000 | |
Total purchase consideration | $ 80,812,000 |