Filed 13 Jun 19

Document and Entity Information

Document and Entity Information - shares3 Months Ended
May 04, 2019May 31, 2019
Document and Entity Information
Entity Registrant NameTailored Brands Inc
Entity Central Index Key0000884217
Document Type10-Q
Document Period End DateMay 4,
2019
Amendment Flagfalse
Current Fiscal Year End Date--02-01
Entity Current Reporting StatusYes
Entity Filer CategoryLarge Accelerated Filer
Entity Common Stock, Shares Outstanding50,519,133
Entity Small Businessfalse
Entity Emerging Growth Companyfalse
Entity Shell Companyfalse
Document Fiscal Year Focus2019
Document Fiscal Period FocusQ1

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018
CURRENT ASSETS:
Cash and cash equivalents $ 29,749 $ 55,431 $ 93,166
Accounts receivable, net80,623 73,073 87,411
Inventories874,412 830,426 843,671
Other current assets49,904 70,712 69,937
Total current assets1,034,688 1,029,642 1,094,185
PROPERTY AND EQUIPMENT, net428,380 439,172 437,944
OPERATING LEASE RIGHT-OF-USE ASSETS955,970
RENTAL PRODUCT, net103,895 99,770 128,744
GOODWILL78,964 79,491 104,802
INTANGIBLE ASSETS, net156,614 163,901 167,320
OTHER ASSETS6,942 8,514 12,827
TOTAL ASSETS2,765,453 1,820,490 1,945,822
CURRENT LIABILITIES:
Accounts payable218,492 228,979 192,878
Accrued expenses and other current liabilities316,821 282,029 350,414
Current portion of operating lease liabilities183,011
Income taxes payable15,923 15,968 1,740
Current portion of long-term debt9,000 11,619 9,000
Total current liabilities743,247 538,595 554,032
LONG-TERM DEBT, net1,151,196 1,153,242 1,277,508
OPERATING LEASE LIABILITIES804,895
DEFERRED TAXES, net AND OTHER LIABILITIES70,161 125,022 151,503
Total liabilities2,769,499 1,816,859 1,983,043
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY:
Preferred stock
Common stock504 501 496
Capital in excess of par507,039 505,157 494,849
Accumulated deficit(470,411)(468,048)(510,441)
Accumulated other comprehensive loss(41,178)(33,979)(22,125)
Total shareholders' (deficit) equity(4,046)3,631 (37,221)
TOTAL LIABILITIES AND SHAREHOLDERS? (DEFICIT) EQUITY $ 2,765,453 $ 1,820,490 $ 1,945,822

CONSOLIDATED STATEMENTS OF EARN

CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Net sales:
Total net sales $ 781,387 $ 817,964
Cost of sales:
Total cost of sales460,831 472,740
Gross margin:
Total gross margin320,556 345,224
Advertising expense45,043 41,233
Selling, general and administrative expenses245,211 251,094
Operating (loss) income30,302 52,897
Interest income96 85
Interest expense(18,663)(21,981)
Loss on extinguishment of debt, net(12,711)
(Loss) earnings before income taxes11,735 18,290
Provision for income taxes4,593 4,381
Net earnings (loss) $ 7,142 $ 13,909
Net earnings per common share:
Basic (in dollars per share) $ 0.14 $ 0.28
Diluted (in dollars per share) $ 0.14 $ 0.27
Weighted-average common shares outstanding:
Basic (in shares)50,280 49,458
Diluted (in shares)50,587 50,720
Retail Segment
Net sales:
Total net sales $ 724,662 $ 754,843
Cost of sales:
Total cost of sales419,240 426,074
Gross margin:
Total gross margin305,422 328,769
Corporate Apparel Segment
Net sales:
Total net sales56,725 63,121
Cost of sales:
Total cost of sales41,591 46,666
Gross margin:
Total gross margin15,134 16,455
Retail clothing product | Retail Segment
Net sales:
Total net sales594,779 613,644
Cost of sales:
Total cost of sales268,644 276,220
Gross margin:
Total gross margin326,135 337,424
Rental services | Retail Segment
Net sales:
Total net sales93,740 100,227
Cost of sales:
Total cost of sales13,017 14,657
Gross margin:
Total gross margin80,723 85,570
Total alteration and other services | Retail Segment
Net sales:
Total net sales36,143 40,972
Cost of sales:
Total cost of sales33,847 34,178
Gross margin:
Total gross margin2,296 6,794
Occupancy costs | Retail Segment
Cost of sales:
Total cost of sales103,732 101,019
Gross margin:
Total gross margin $ (103,732) $ (101,019)

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net earnings (loss) $ 7,142 $ 13,909
Currency translation adjustments(1,585)(14,143)
Unrealized (loss) gain on cash flow hedges, net of tax(5,614)2,800
Comprehensive (loss) income $ (57) $ 2,566

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY - USD ($) $ in ThousandsCommon StockCapital in Excess of ParAccumulated DeficitAccumulated Other Comprehensive LossTotal
Balance at the beginning of the year at Feb. 03, 2018 $ 492 $ 491,648 $ (479,166) $ (10,782) $ 2,192
Increase (Decrease) in Shareholders' Equity
Net earnings13,909 13,909
Other comprehensive loss(11,343)(11,343)
Cash dividends - $0.18 per share(9,360)(9,360)
Share-based compensation4,581 4,581
Common stock issued - 306,505 and 445,932 shares for May 4, 2019 and May 5, 2018 respectively4 3,645 3,649
Tax payments related to vested deferred stock units(5,025)(5,025)
Balance at the end of the year at May. 05, 2018496 494,849 (510,441)(22,125)(37,221)
Increase (Decrease) in Shareholders' Equity
Cumulative adjustment | Cumulative adjustment upon ASC 606 adoption (see Note 5)(35,824)(35,824)
Balance at the beginning of the year at Feb. 02, 2019501 505,157 (468,048)(33,979)3,631
Increase (Decrease) in Shareholders' Equity
Net earnings7,142 7,142
Other comprehensive loss(7,199)(7,199)
Cash dividends - $0.18 per share(9,103)(9,103)
Share-based compensation2,398 2,398
Common stock issued - 306,505 and 445,932 shares for May 4, 2019 and May 5, 2018 respectively3 424 427
Tax payments related to vested deferred stock units(940)(940)
Balance at the end of the year at May. 04, 2019 $ 504 $ 507,039 (470,411) $ (41,178)(4,046)
Increase (Decrease) in Shareholders' Equity
Cumulative adjustment | Cumulative adjustment upon ASC 842 adoption (see Note 12) $ (402) $ (402)

CONSOLIDATED STATEMENTS OF SH_2

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (Parenthetical) - $ / shares3 Months Ended
May 04, 2019May 05, 2018
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
Cash dividends declared per common share (in dollars per share) $ 0.18 $ 0.18
Common stock issued (in shares)306,505 445,932

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 7,142 $ 13,909
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization26,695 26,679
Operating lease right-of-use asset amortization49,969
Rental product amortization8,348 8,756
Loss on extinguishment of debt, net12,711
Amortization of deferred financing costs and discount on long-term debt486 1,333
Loss on disposition of assets3,618
Asset impairment charges184 269
Share-based compensation2,398 4,581
Deferred tax benefit1,599 748
Other85 73
Changes in operating assets and liabilities:
Accounts receivable(7,504)(10,871)
Inventories(44,900)(11,886)
Rental product(12,831)(14,377)
Other assets(269)8,124
Accounts payable, accrued expenses and other current liabilities30,872 82,755
Income taxes payable(28)(4,301)
Other liabilities(50,452)(1,893)
Net cash provided by operating activities11,794 120,228
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(21,691)(10,980)
Proceeds from divestiture of business17,732
Net cash (used in) provided by investing activities(21,691)6,752
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on original term loan(993,420)
Proceeds from new term loan895,500
Payments on new term loan(4,870)(2,250)
Proceeds from asset-based revolving credit facility399,500 1,500
Payments on asset-based revolving credit facility(399,500)(1,500)
Repurchase and retirement of senior notes(18,240)
Deferred financing costs(5,576)
Cash dividends paid(9,590)(9,618)
Proceeds from issuance of common stock427 3,649
Tax payments related to vested deferred stock units(940)(5,025)
Net cash used in financing activities(14,973)(134,980)
Effect of exchange rate changes(812)(2,441)
DECREASE IN CASH AND CASH EQUIVALENTS(25,682)(10,441)
Balance at beginning of period55,431 103,607
Balance at end of period $ 29,749 $ 93,166

Significant Accounting Policies

Significant Accounting Policies3 Months Ended
May 04, 2019
Significant Accounting Policies
Significant Accounting Policies1. Significant Accounting Policies
Basis of Presentation — The condensed consolidated financial statements herein include the accounts of Tailored Brands, Inc. and its subsidiaries (the "Company") and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented.
Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended February 2, 2019.
Unless the context otherwise requires, "Company", "we", "us" and "our" refer to Tailored Brands, Inc. and its subsidiaries.
The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates.
Recent Accounting Pronouncements Not Yet Adopted — We have considered all new accounting pronouncements not yet adopted and have concluded there are no new pronouncements that may have a material impact on our financial position, results of operations, or cash flows, based on current information, except for those listed below.
In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for public companies for annual reporting periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of ASU 2018-15 is permitted. We are currently evaluating the impact ASU 2018-15 may have on our financial position, results of operations or cash flows .

Divestiture of MW Cleaners

Divestiture of MW Cleaners3 Months Ended
May 04, 2019
Divesture of MW Cleaners
Divestiture of MW Cleaners2. Divestiture of MW Cleaners
On February 28, 2018, we entered into a definitive agreement to divest our MW Cleaners business for approximately $18.0 million, subject to certain adjustments, and the transaction closed on March 3, 2018. During the first quarter of 2018, we received cash proceeds of $17.7 million and recorded a loss on the divestiture totaling $3.6 million, which is included within selling, general and administrative expenses (“SG&A”) in the condensed consolidated statement of earnings, and relates to our retail segment. For fiscal 2018, the total loss on divestiture of MW Cleaners was $3.8 million.
We determined that the sale of the MW Cleaners business did not represent a strategic shift and will not have a major effect on our consolidated results of operations, financial position or cash flows. Accordingly, we have not presented the sale as a discontinued operation in the condensed consolidated financial statements.

Earnings Per Share

Earnings Per Share3 Months Ended
May 04, 2019
Earnings Per Share
Earnings Per Share3. Earnings Per Share
Basic earnings per common share is computed by dividing net earnings by the weighted-average common shares outstanding during the period. Diluted earnings per common share is calculated using the treasury stock method. Basic and diluted earnings per common share are computed using the actual net earnings and the actual weighted-average common shares outstanding rather than the rounded numbers presented within our condensed consolidated statement of earnings and the accompanying notes. As a result, it may not be possible to recalculate earnings per common share in our condensed consolidated statement of earnings and the accompanying notes. The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share amounts):
For the Three Months Ended
May 4,
May 5,
2019
2018
Numerator
Net earnings
$
7,142
$
13,909
Denominator
Basic weighted-average common shares outstanding
50,280
49,458
Dilutive effect of share-based awards
307
1,262
Diluted weighted-average common shares outstanding
50,587
50,720
Net earnings per common share:
Basic
$
0.14
$
0.28
Diluted
$
0.14
$
0.27
For the three months ended May 4, 2019 and May 5, 2018, 2.0 million and 0.4 million anti-dilutive shares of common stock were excluded from the calculation of diluted earnings per common share, respectively.

Debt

Debt3 Months Ended
May 04, 2019
Debt
Debt4. Debt
In 2014, The Men's Wearhouse entered into a term loan credit agreement that provided for a senior secured term loan in the aggregate principal amount of $1.1 billion (the "Original Term Loan") and a $500.0 million asset-based revolving credit agreement (the "ABL Facility", and together with the Original Term Loan, the "Credit Facilities") with certain of our U.S. subsidiaries and Moores the Suit People Inc., one of our Canadian subsidiaries, as co-borrowers. Proceeds from the Original Term Loan were reduced by an $11.0 million original issue discount ("OID"), which was presented as a reduction of the outstanding balance on the Original Term Loan on the balance sheet and was to be amortized to interest expense over the contractual life of the Original Term Loan. In addition, in 2014, The Men's Wearhouse issued $600.0 million in aggregate principal amount of 7.00% Senior Notes due 2022 (the "Senior Notes").
In October 2017, The Men’s Wearhouse amended the ABL Facility in part to increase the principal amount available to $550.0 million and extend the maturity date to October 2022. In April 2018, The Men’s Wearhouse refinanced its Original Term Loan, and in October 2018, amended its term loan to reduce the interest rate margin. See Credit Facilities section below for additional information.
The Credit Facilities and the Senior Notes contain customary non-financial and financial covenants, including fixed charge coverage ratios, total leverage ratios and secured leverage ratios. Should our total leverage ratio and secured leverage ratio exceed certain thresholds specified in the agreements, we would be subject to certain additional restrictions, including limitations on our ability to make significant acquisitions and incur additional indebtedness. As of May 4, 2019, our total leverage ratio and secured leverage ratio are below the thresholds specified in the agreements, which results in the elimination of these additional restrictions. In addition, as a result of the refinancing of our Original Term Loan and amending of our ABL Facility, our ability to pay dividends on our common stock has increased from a maximum of $10.0 million per quarter to a maximum of $15.0 million per quarter.
Credit Facilities
In April 2018, we refinanced our Original Term Loan. Immediately prior to the refinancing, the Original Term Loan consisted of $593.4 million in aggregate principal amount with an interest rate of LIBOR plus 3.50% (with a floor of 1.0%) and $400.0 million in aggregate principal amount with a fixed rate of 5.0% per annum. Upon entering into the refinancing, we made a prepayment of $93.4 million on the Original Term Loan using cash on hand.
As a result, we refinanced $900.0 million in aggregate principal amount of term loans then outstanding with a new Term Loan totaling $900.0 million (the “New Term Loan”). Additionally, we may continue to request additional term loans or incremental equivalent debt borrowings, all of which are uncommitted, in an aggregate amount up to the greater of (1) $250.0 million and (2) an aggregate principal amount such that, on a pro forma basis (giving effect to such borrowings), our senior secured leverage ratio will not exceed 2.5 to 1.0.
The New Term Loan will amortize in an annual amount equal to 1.0% of the principal amount of the New Term Loan, payable quarterly commencing on May 1, 2018. Proceeds from the New Term Loan were reduced by a $4.5 million OID, which was presented as a reduction of the outstanding balance on the New Term Loan on the balance sheet and was to be amortized to interest expense over the contractual life of the New Term Loan. The New Term Loan extends the maturity date of the Original Term Loan from June 18, 2021 until April 9, 2025, subject to a maturity provision that would accelerate the maturity of the New Term Loan to April 1, 2022 if any of the Company’s obligations under its Senior Notes remain outstanding on April 1, 2022.
The New Term Loan bears interest at a rate per annum equal to an applicable margin plus, at the Company’s option, either LIBOR (with a floor of 1.0%) or the base rate (with a floor of 2.0%). In October 2018, we amended the New Term Loan resulting in a reduction in the interest rate margin of 25 basis points. As a result of the amendment, the margins for borrowings under the New Term Loan are 3.25% for LIBOR and 2.25% for the base rate and the OID was eliminated. In connection with the October 2018 amendment of the New Term Loan, we incurred deferred financing costs of $1.1 million, which will be amortized over the life of the New Term Loan using the interest method. The maturity date for the New Term Loan remains April 9, 2025, and all other material provisions of the New Term Loan remain unchanged.
The interest rate on the New Term Loan is based on 1-month LIBOR, which was 2.47% at May 4, 2019, plus the applicable margin of 3.25%, resulting in a total interest rate of 5.72%. We have two interest rate swap agreements where the variable rates due under the New Term Loan have been exchanged for a fixed rate, including an interest rate swap entered into during June 2018. At May 4, 2019, the total notional amount under these interest rate swaps is $710.0 million. Please see Note 15 for additional information on our interest rate swaps.
As a result of our interest rate swaps, 80% of the variable interest rate under the New Term Loan has been converted to a fixed rate and, as of May 4, 2019, the New Term Loan had a weighted average interest rate of 5.77%.
In October 2017, we amended our ABL Facility, which now provides for a senior secured revolving credit facility of $550.0 million, with possible future increases to $650.0 million under an expansion feature, that matures in October 2022, and is guaranteed, jointly and severally, by Tailored Brands, Inc. and certain of our U.S. subsidiaries. The ABL Facility has several borrowing and interest rate options including the following indices: (i) adjusted LIBOR, (ii) Canadian Dollar Offered Rate ("CDOR") rate, (iii) Canadian prime rate or (iv) an alternate base rate (equal to the greater of the prime rate, the New York Federal Reserve Bank (“NYFRB”) rate plus 0.5% or adjusted LIBOR for a one-month interest period plus 1.0%). Advances under the ABL Facility bear interest at a rate per annum using the applicable indices plus a varying interest rate margin of up to 1.75%. The ABL Facility also provides for fees applicable to amounts available to be drawn under outstanding letters of credit which range from 1.25% to 1.75%, and a fee on unused commitments of 0.25%. As of May 4, 2019, $48.5 million in borrowings were outstanding under the ABL Facility at a weighted average interest rate of approximately 5.3%. During the three months ended May 4, 2019, the maximum borrowing outstanding under the ABL Facility was $100.0 million.
We utilize letters of credit primarily as collateral for workers compensation claims and to secure inventory purchases. At May 4, 2019, letters of credit totaling approximately $38.7 million were issued and outstanding. Borrowings available under the ABL Facility as of May 4, 2019 were $424.9 million.
The obligations under the Credit Facilities are secured on a senior basis by a first priority lien on substantially all of the assets of the Company, The Men’s Wearhouse and its U.S. subsidiaries and, in the case of the ABL Facility, Moores The Suit People Inc. The Credit Facilities and the related guarantees and security interests granted thereunder are senior secured obligations of, and will rank equally with all present and future senior indebtedness of the Company, the co-borrowers and the respective guarantors.
Senior Notes
The Senior Notes are guaranteed, jointly and severally, on an unsecured basis by Tailored Brands, Inc. and certain of our U.S. subsidiaries. The Senior Notes and the related guarantees are senior unsecured obligations of the Company and the guarantors, respectively, and will rank equally with all of the Company's and each guarantor's present and future senior indebtedness. The Senior Notes will mature in July 2022. Interest on the Senior Notes is payable on January 1 and July 1 of each year.
We may redeem some or all of the Senior Notes at any time on or after July 1, 2017 at the redemption prices set forth in the indenture governing the Senior Notes. Upon the occurrence of certain specific changes of control, we may be required to offer to purchase the Senior Notes at 101% of their aggregate principal amount plus accrued and unpaid interest thereon to the date of purchase.
During fiscal 2018, we completed a partial redemption of $175.0 million in face value of our Senior Notes. The Senior Notes were redeemed at a redemption price equal to $1,035 per $1,000 principal amount, plus accrued and unpaid interest.
Long-Term Debt
During the first quarter of 2019, in accordance with the provisions of the New Term Loan, we made a mandatory excess cash flow payment of $2.6 million to the Term Loan lenders.
In connection with the April 2018 refinancing of the New Term Loan, we recorded a loss on extinguishment of debt totaling $11.9 million consisting of the elimination of unamortized deferred financing costs and OID related to the Original Term Loan, which is included as a separate line in the condensed consolidated statement of earnings. In addition, during the first quarter of 2018, we repurchased and retired $17.6 million in face value of Senior Notes through open market repurchases. As a result, we recorded a net loss on extinguishment totaling $0.9 million, consisting of a $0.6 million loss upon repurchase and the elimination of unamortized deferred financing costs totaling $0.3 million related to the Senior Notes.
The following table provides details on our long-term debt as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Term Loan (net of unamortized OID of $0.0 million at May 4, 2019, $4.5 million at May 5, 2018, and $0.0 million at February 2, 2019)
$
886,130
$
893,299
$
891,000
Senior Notes
228,607
403,607
228,607
ABL Facility
48,500

48,500
Less: Deferred financing costs related to the Term Loan and Senior Notes
(3,041)
(10,398)
(3,246)
Total long-term debt, net
1,160,196
1,286,508
1,164,861
Current portion of long-term debt
(9,000)
(9,000)
(11,619)
Total long-term debt, net of current portion
$
1,151,196
$
1,277,508
$
1,153,242

Revenue Recognition

Revenue Recognition3 Months Ended
May 04, 2019
REVENUE RECOGNITION
REVENUE RECOGNITION5. Revenue Recognition
Adoption of ASC 606
Effective February 4, 2018, we adopted ASC 606, Revenue from Contracts with Customers and all related amendments (“ASC 606”), to all contracts using the modified retrospective approach. We recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The adoption had no impact to our previously reported results of operations or cash flows.
The following table depicts the cumulative effect of the changes made to our February 3, 2018 balance sheet for the adoption of ASC 606 (in thousands):
Reported
Adjusted
Balance at
Impact of
Balance at
February 3,
Adoption of
February 3,
2018
ASC 606
2018
Assets:
Accounts receivable, net
$
79,783
$
(303)
$
79,480
Inventories
851,931
(17,837)
834,094
Other current assets
78,252
2,753
81,005
Liabilities:
Accrued expenses and other current liabilities
285,537
32,378
317,915
Deferred taxes, net and other liabilities
164,191
(11,941)
152,250
Equity:
Accumulated deficit
(479,166)
(35,824)
(514,990)
The adoption of ASC 606 primarily impacted the timing of revenue recognition related to our customer loyalty program, gift cards and e-commerce sales within our retail segment, as discussed in more detail below. In addition, for our corporate apparel segment, certain deferred revenue balances along with related inventory amounts were eliminated as part of the cumulative adjustment to opening retained earnings. Also, for estimated sales returns, we recognize allowances for estimated sales returns on a gross basis rather than a net basis on the condensed consolidated balance sheets.
Revenues
The following table depicts the disaggregation of revenue by major source (in thousands):
For the Three Months Ended
May 4, 2019
May 5, 2018
Net sales:
Men's tailored clothing product
$
342,955
$
355,737
Men's non-tailored clothing product
228,982
235,606
Women's clothing product
19,214
19,582
Other (1)
3,628
2,719
Total retail clothing product
594,779
613,644
Rental services
93,740
100,227
Alteration services
36,143
38,421
Retail dry cleaning services (2)

2,551
Total alteration and other services
36,143
40,972
Total retail sales
724,662
754,843
Corporate apparel clothing product
56,725
63,121
Total net sales
$
$
(1)
Other consists of franchise and licensing revenues and gift card breakage. Franchise revenues are generally recognized at a point in time while licensing revenues consist primarily of minimum guaranteed royalty amounts recognized over an elapsed time period.
(2)
On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information.
Please see Note 16 for additional information regarding our reporting segments.
Retail Segment
For retail clothing product revenue, we transfer control and recognize revenue at a point in time, upon sale or shipment of the merchandise, net of actual sales returns and an accrual for estimated sales returns. For rental and alteration services, we transfer control and recognize revenue at a point in time, upon receipt by the customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales, use and value added taxes we collect from our customers and are remitted to governmental agencies are excluded from revenue.
Loyalty Program
We maintain a customer loyalty program for our Men’s Wearhouse, Men’s Wearhouse and Tux, Jos. A. Bank and Moores brands in which customers receive points for purchases. Points are generally equivalent to dollars spent on a one‑to‑one basis, excluding any sales tax dollars, and, historically, did not expire. During the fourth quarter of 2018, we finalized our decision to implement an expiration policy for loyalty program points beginning in the second quarter of fiscal 2019. Upon reaching 500 points, customers are issued a $50 rewards certificate which they may redeem for purchases at our stores or online. Generally, reward certificates earned must be redeemed no later than six months from the date of issuance. We believe our loyalty programs represents a customer option that is a material right and, accordingly, is a performance obligation in the contract with our customer. Therefore, we record our obligation for future point redemptions using a deferred revenue model.
When loyalty program members earn points, we recognize a portion of the transaction as revenue for merchandise product sales or services and defer a portion of the transaction representing the value of the related points. The value of the points is recorded in deferred revenue on our condensed consolidated balance sheet and recognized into revenue when the points are converted into a rewards certificate and the certificate is used.
We account for points earned and certificates issued that will not be redeemed by loyalty members, which we refer to as breakage. We review our breakage estimates at least annually based upon the latest available information regarding redemption and expiration patterns.
Our estimate of the expected usage of points and certificates requires significant management judgment. Current and future changes to our assumptions or to loyalty program rules may result in material changes to the deferred revenue balance as well as recognized revenues from the loyalty programs.
Gift Card Breakage
Proceeds from the sale of gift cards are recorded as a liability and are recognized as net sales from products and services when the cards are redeemed. Our gift cards do not have expiration dates. In addition, we recognize revenue for gift cards for which the likelihood of redemption is deemed to be remote and for which there is no legal obligation to remit the value of such unredeemed gift cards to any relevant jurisdictions (commonly referred to as gift card breakage) under the redemption recognition method. This method records gift card breakage as revenue on a proportional basis over the redemption period based on our historical gift card breakage rate. We review our gift card breakage estimate based on our historical redemption patterns.
Sales Returns
Revenue from merchandise product sales is reported net of sales returns, which includes an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. Our refund liability for sales returns was $6.4 million at May 4, 2019, which is included in accrued and other current liabilities and represents the expected value of the refund that will be due to our customers. We also have a corresponding asset included in other current assets that represents the right to recover products from customers associated with sales returns of $3.3 million at May 4, 2019.
Corporate Apparel Segment
For our corporate apparel segment, we sell corporate clothing and uniforms to workforces under a contract or by purchase order. We transfer control and recognize revenue at a point in time, generally upon delivery of the product to the customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales, use and value added taxes we collect from our customers and are remitted to governmental agencies are excluded from revenue.
Contract Liabilities
The following table summarizes the opening and closing balances of our contract liabilities (in thousands):
Balance at
Increase
Balance at
February 2, 2019
(Decrease)
May 4, 2019
Contract liabilities
$
122,828
$
43,074
$
165,902
Balance at
Increase
Balance at
February 3, 2018
(Decrease)
May 5, 2018
As Adjusted
Contract liabilities
$
141,552
$
46,791
$
188,343
Contract liabilities include cash payments received from customers in advance of our performance, including amounts which are refundable. These liabilities primarily consist of customer deposits related to rental product or custom clothing transactions since we typically receive payment from our customers prior to our performance and deferred revenue related to our loyalty programs and unredeemed gift cards. These amounts are included as “Customer deposits, prepayments and refunds payable,” “Loyalty program liabilities” and “Unredeemed gift cards,” respectively, within the accrued expenses and other current liabilities line item on our condensed consolidated balance sheet. Please see Note 9 for additional information on our accrued expenses and other current liabilities.
The amount of revenue recognized for the three months ended May 4, 2019 and May 5, 2018 that was included in the respective opening contract liability balance was $52.2 million and $41.7 million, respectively. This revenue primarily consists of recognition of deposits for completed transactions as well as redeemed certificates related to our loyalty program and gift card redemptions.

Supplemental Cash Flows

Supplemental Cash Flows3 Months Ended
May 04, 2019
Supplemental Cash Flows
Supplemental Cash Flows6. Supplemental Cash Flows
Supplemental disclosure of cash flow information is as follows (in thousands):
For the Three Months Ended
May 4,
May 5,
2019
2018
Cash paid for interest
$
13,763
$
13,380
Cash paid for income taxes, net
$
6,455
$
2,128
We had unpaid capital expenditure purchases included in accounts payable and accrued expenses and other current liabilities of approximately $5.9 million and $4.7 million at May 4, 2019 and May 5, 2018, respectively. Capital expenditure purchases are recorded as cash outflows from investing activities in the condensed consolidated statement of cash flows in the period they are paid. Please see Note 12 for other cash flow disclosures related to leases.

Inventories

Inventories3 Months Ended
May 04, 2019
INVENTORIES
INVENTORIES7. Inventories
The following table provides details on our inventories as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Finished goods
$
745,607
$
749,746
$
682,610
Raw materials and merchandise components
128,805
93,925
147,816
Total inventories
$
874,412
$
843,671
$
830,426

Income Taxes

Income Taxes3 Months Ended
May 04, 2019
INCOME TAXES
INCOME TAXES8. Income Taxes
Our effective income tax rate increased to 39.1% for the first quarter of 2019 from 24.0% for the first quarter of 2018 primarily due to an increase in the discrete tax expense related to the net excess shortfalls from share-based awards vesting in the first quarter of 2019.
Additionally, we are currently undergoing several tax audits; however, we currently do not believe these audits will result in any material charge to tax expense in the future.

Other Current Assets, Accrued E

Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities3 Months Ended
May 04, 2019
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities
OTHER CURRENT ASSETS, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES AND DEFERRED TAXES AND OTHER LIABILITIES9. Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities
The following table provides details on our other current assets as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Prepaid expenses
$
33,850
$
44,438
$
56,361
Tax receivable
5,090
12,814
584
Other
10,964
12,685
13,767
Total other current assets
$
49,904
$
69,937
$
70,712
The decrease in prepaid expenses as of May 4, 2019, is due to the impact on prepaid rent resulting from the adoption of Accounting Standards Codification 842, Leases (“ASC 842”), effective February 3, 2019. Please see Note 12 for additional information.
The following table provides details on our accrued expenses and other current liabilities as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Customer deposits, prepayments and refunds payable
$
85,985
$
87,849
$
40,620
Accrued salary, bonus, sabbatical, vacation and other benefits
54,528
56,066
81,503
Loyalty program liabilities
44,893
65,597
44,434
Sales, value added, payroll, property and other taxes payable
37,821
37,605
25,547
Unredeemed gift cards
28,352
29,921
32,178
Accrued workers compensation and medical costs
22,357
24,639
23,974
Accrued dividends
9,993
10,870
10,480
Accrued interest
6,241
10,608
1,828
Accrued royalties
1,270
4,009
1,286
Other
25,381
23,250
20,179
Total accrued expenses and other current liabilities
$
316,821
$
350,414
$
282,029
The following table provides details on our deferred taxes, net and other liabilities as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Deferred and other income tax liabilities, net
$
52,948
$
83,357
$
53,479
Deferred rent and landlord incentives

58,957
57,505
Unfavorable lease liabilities

2,631
1,797
Other
17,213
6,558
12,241
Total deferred taxes, net and other liabilities
$
70,161
$
151,503
$
125,022
The elimination of deferred rent and landlord incentives and unfavorable lease liabilities is due to the adoption of ASC 842, effective February 3, 2019. Please see Note 12 for additional information.

Accumulated Other Comprehensive

Accumulated Other Comprehensive (Loss) Income3 Months Ended
May 04, 2019
Accumulated Other Comprehensive (Loss) Income
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME10. Accumulated Other Comprehensive (Loss) Income
The following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended May 4, 2019 (in thousands and net of tax):
Foreign
Currency
Cash Flow
Pension
Translation
Hedges
Plan
Total
BALANCE— February 2, 2019
$
(29,820)
$
(4,314)
$
155
$
(33,979)
Other comprehensive loss before reclassifications
(1,585)
(5,098)

(6,683)
Amounts reclassified from accumulated other comprehensive loss

(516)

(516)
Net current-period other comprehensive loss
(1,585)
(5,614)

(7,199)
BALANCE— May 4, 2019
$
(31,405)
$
(9,928)
$
155
$
(41,178)
The following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended May 5, 2018 (in thousands and net of tax):
Foreign
Currency
Cash Flow
Pension
Translation
Hedges
Plan
Total
BALANCE— February 3, 2018
$
(11,116)
$
145
$
189
$
(10,782)
Other comprehensive (loss) income before reclassifications
(14,143)
2,087

(12,056)
Amounts reclassified from accumulated other comprehensive income

713

713
Net current-period other comprehensive (loss) income
(14,143)
2,800

(11,343)
BALANCE— May 5, 2018
$
(25,259)
$
2,945
$
189
$
(22,125)
Amounts reclassified from other comprehensive (loss) income for the three months ended May 4, 2019 and May 5, 2018 relate to changes in the fair value of our interest rate swaps which is recorded within interest expense in the condensed consolidated statement of earnings and changes in the fair value of cash flow hedges related to inventory purchases, which is recorded within cost of sales in the condensed consolidated statement of earnings.

Share-Based Compensation Plans

Share-Based Compensation Plans3 Months Ended
May 04, 2019
Share-Based Compensation Plans
Share-Based Compensation Plans11. Share-Based Compensation Plans
For a discussion of our share-based compensation plans, please see Note 14 in our Annual Report on Form 10-K for the fiscal year ended February 2, 2019.
Non-Vested Deferred Stock Units and Performance Units
The following table summarizes the activity of time-based and performance-based awards (collectively, "DSUs") for the three months ended May 4, 2019:
Weighted-Average
Units
Grant-Date Fair Value
Time-
Performance-
Time-
Performance-
Based
Based
Based
Based
Non-Vested at February 2, 2019
939,086
336,906
$
22.60
$
18.59
Granted




Vested (1)
(326,826)
(28,686)
Forfeited
(55,406)
(23,755)
Non-Vested at May 4, 2019
556,854
284,465
$
$
(1)
Includes 121,995 shares relinquished for tax payments related to vested DSUs for the three months ended May 4, 2019.
As of May 4, 2019, we have unrecognized compensation expense related to non-vested DSUs of $11.7 million, which is expected to be recognized over a weighted-average period of 1.4 years.
Stock Options and Stock Appreciation Rights (“SARs”)
The following table summarizes the activity of stock options for the three months ended May 4, 2019:
Weighted-
Number of
Average
Shares
Exercise Price
Outstanding at February 2, 2019
1,252,072
$
23.64
Granted
3,042,310
Exercised


Forfeited
(30,286)
Expired
(32,271)
Outstanding at May 4, 2019
4,231,825
$
Exercisable at May 4, 2019
818,982
$
During the first quarter of 2019, we granted SARs, which vest ratably over a period of three years, and will be settled in stock. Each vested SAR entitles the holder to the right of the difference between the value of our common stock on the date of exercise and the common stock price on the date of grant. We use the Black-Scholes option pricing model to estimate the fair value of SARs on the date of grant.
The following table summarizes the activity of SARs for the three months ended May 4, 2019:
Weighted-
Number of
Average
Shares
Exercise Price
Outstanding at February 2, 2019

$

Granted
414,476
Exercised


Forfeited


Expired


Outstanding at May 4, 2019
414,476
$
Exercisable at May 4, 2019

$

The weighted-average grant date fair value of the 3,042,310 stock options and 414,476 SARs granted during the three months ended May 4, 2019 was $3.01 per share. The following table summarizes the weighted-average assumptions used to fair value the stock options and SARs at the date of grant using the Black-Scholes option model for the three months ended May 4, 2019:
For the Three Months Ended
May 4,
2019
Risk-free interest rate
Expected lives
5.0 years
Dividend yield
Expected volatility
As of May 4, 2019, we have unrecognized compensation expense related to non-vested stock options and SARs of $12.1 million, which is expected to be recognized over a weighted-average period of 1.9 years.
Cash Settled Awards
We have granted stock-based awards to certain employees, which vest over a period of three years, and will be settled in cash ("cash settled awards"). The fair value of the cash settled awards at each reporting period is based on the price of our common stock. The fair value of the cash settled awards will be remeasured at each reporting period until the awards are settled. Cash settled awards are classified as liabilities in the condensed consolidated balance sheets. At May 4, 2019, the liability associated with the cash settled awards was $3.4 million with $2.1 million recorded in accrued expenses and other current liabilities and $1.3 million recorded in other liabilities in the condensed consolidated balance sheets.
The following table summarizes the activity of cash settled awards, based on their initial grant date values, for the three months ended May 4, 2019 (in thousands):
Cash Settled Awards
Non-Vested at February 2, 2019
$
5,072
Granted
4,237
Vested

Forfeited
(199)
Non-Vested at May 4, 2019
$
9,110
As of May 4, 2019, we have unrecognized compensation expense related to non-vested cash settled awards of $4.7 million, which is expected to be recognized over a weighted-average period of 1.8 years.
Share-Based Compensation Expense
Share-based compensation expense, including cash settled awards, recognized for the three months ended May 4, 2019 and May 5, 2018, was $1.9 million and $6.5 million, respectively.

Leases

Leases3 Months Ended
May 04, 2019
Leases
Leases12. Leases
Adoption of ASC 842
Effective February 3, 2019, we adopted ASU No. 2016-02, Leases (Topic 842) , and all related amendments (“ASC 842”) using the modified retrospective approach. As part of the adoption, we made the following elections:
·
We elected the package of practical expedients under which we did not reassess our prior conclusions about lease identification, lease classification and initial direct costs.
·
We elected to not separate lease and non-lease components for all leases.
·
We elected to exempt leases with an initial term of twelve months or less from balance sheet recognition.
·
We elected the land easement practical expedient under which we did not reassess whether existing land easements not accounted for as leases under previous guidance are or contain leases under ASC 842.
·
We did not elect the hindsight practical expedient for all leases.
In addition, in July 2018, the FASB approved an optional transition method that removed the requirement to restate prior period financial statements upon adoption of the standard with a cumulative-effect adjustment to retained earnings in the period of adoption and we elected to apply this transition method. As a result, the comparative period information has not been restated and continues to be reported under the accounting standards in effect for the period presented. The adoption of ASC 842 had no impact to our previously reported results of operations or cash flows.
The following table depicts the cumulative effect of the changes made to our February 2, 2019 balance sheet for the adoption of ASC 842 effective on February 3, 2019 (in thousands):
Reported
Adjusted
Balance at
Impact of
Balance at
February 2,
Adoption of
February 3,
2019
ASC 842
2019
Assets:
Other current assets
$
70,712
$
(20,754)
$
49,958
Operating lease right-of-use assets

896,270
896,270
Intangible assets, net
163,901
(6,682)
157,219
Current Liabilities:
Accrued expenses and other current liabilities
282,029
(151)
281,878
Current portion of operating lease liabilities

183,726
183,726
Noncurrent Liabilities:
Operating lease liabilities

745,116
745,116
Deferred taxes, net and other liabilities
125,022
(59,455)
65,567
Equity:
Accumulated deficit
(468,048)
(402)
(468,450)
The adoption of ASC 842 primarily resulted in the recognition of operating lease liabilities totaling $928.8 million, based upon the present value of the remaining minimum rental payments using discount rates as of the adoption date, with $183.7 million within current liabilities and $745.1 million in noncurrent liabilities. In addition, we recorded corresponding right-of-use assets totaling $896.3 million based upon the operating lease liabilities adjusted for favorable lease intangible assets, previously included within intangible assets, net and deferred rent and unfavorable lease liabilities, previously included within deferred taxes, net and other liabilities.
Lease Information
We lease store locations, office and warehouse facilities, vehicles and equipment under various non-cancelable operating leases expiring in various years through 2030.
Substantially all of our stores are leased, generally for five to ten year initial terms. Certain store leases include one or more options to renew, with renewal terms that range from one to ten years. Management uses its judgment to determine if a renewal option is reasonably certain of being exercised including consideration of the significant investment related to the identification, opening and operation of these store locations. In addition, under our real estate leases, we pay costs such as real estate taxes and common area maintenance and certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels. These costs are generally considered variable lease payments, and are recognized when deemed probable of payment. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, we sublease certain real estate to third parties. Amounts related to subleases were immaterial to the condensed consolidated financial statements.
Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments. Operating lease right-of-use assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, lease incentives and impairment of operating lease right-of-use assets. To determine the present value of the lease payments, we estimated our incremental borrowing rate based on our current credit rating as well as comparisons to comparable borrowing rates of similarly-rated companies.
The components of lease cost are as follows (in thousands):
For the Three Months Ended
May 4, 2019
Operating lease cost
$
62,904
Variable lease cost
19,261
Total lease cost
$
82,165
Operating lease expense is recognized on a straight-line basis over the lease term. Total lease costs for stores and our distribution network are included in cost of sales while other total lease costs are included in SG&A expenses.
Supplemental balance sheet information related to operating leases consists of the following (in thousands):
May 4, 2019
Operating lease right-of-use assets
$
955,970
Current portion of operating lease liabilities
$
183,011
Noncurrent portion operating lease liabilities
804,895
Total operating lease liabilities
$
987,906
Lease term and discount rate for operating leases were as follows:
May 4, 2019
Weighted average remaining lease term
4.2 years
Weighted average discount rate
5.29%
Supplemental disclosures of cash flow information consists of the following (in thousands):
For the Three Months Ended
May 4, 2019
Cash paid for operating leases
$
63,656
Operating lease assets obtained in exchange for operating lease liabilities
$
1,005,762
At May 4, 2019, we have approximately $987.9 million of non-cancelable operating lease commitments and no finance leases. The following table summarizes the undiscounted annual future minimum lease payments, as of May 4, 2019, for each of the next five years and in the aggregate (in thousands):
Operating Leases
Year 1
$
Year 2
Year 3
Year 4
Year 5
Thereafter
Total lease payments
$
Less: Interest
(165,995)
Present value of lease liabilities
$
As of May 4, 2019, we executed certain real estate leases that had not yet commenced with lease liabilities totaling $4.6 million which are not reflected in the above table. These leases are expected to commence during fiscal 2019.
Disclosures Related to Periods Prior to Adoption of ASC 842
As previously disclosed in our 2018 Annual Report on Form 10-K and under the accounting standards then in effect, minimum future rental payments under non-cancelable leases as of February 2, 2019 for each of the next five years and in the aggregate are as follows (in thousands):
Fiscal Year
Operating Leases
2019
$
239,711
2020
209,596
2021
175,962
2022
134,208
2023
88,187
Thereafter
141,084
Total lease payments
$

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets3 Months Ended
May 04, 2019
GOODWILL AND INTANGIBLE ASSETS
Goodwill and Other Intangible Assets13. Goodwill and Other Intangible Assets
Goodwill
Changes in the net carrying amount of goodwill, all of which relates to our retail segment, for the three months ended May 4, 2019 are as follows (in thousands):
Total
Balance at February 2, 2019
$
79,491
Translation adjustment
(527)
Balance at May 4, 2019
$
78,964
Goodwill is evaluated for impairment at least annually. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. Such events or circumstances could include, but are not limited to, new significant negative industry or economic trends, unanticipated changes in the competitive environment, decisions to significantly modify or dispose of operations and a significant sustained decline in the market price of our stock. No impairment evaluation was considered necessary during the first three months ended May 4, 2019.
Intangible Assets
The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Amortizable intangible assets:
Carrying amount:
Trademarks, tradenames and franchise agreements
$
16,074
$
16,155
$
16,067
Favorable leases

12,967
11,844
Customer relationships
26,623
27,477
26,553
Total carrying amount
42,697
56,599
54,464
Accumulated amortization:
Trademarks, tradenames and franchise agreements
(10,877)
(10,594)
(10,796)
Favorable leases

(5,178)
(5,162)
Customer relationships
(19,455)
(17,790)
(18,851)
Total accumulated amortization
(30,332)
(33,562)
(34,809)
Total amortizable intangible assets, net
12,365
23,037
19,655
Indefinite-lived intangible assets:
Trademarks and tradename
144,249
144,283
144,246
Total intangible assets, net
$
156,614
$
167,320
$
163,901
The elimination of favorable leases is due to the adoption of ASC 842, effective February 3, 2019. Please see Note 12 for additional information.
Amortization expense associated with intangible assets subject to amortization totaled $0.6 million and $1.0 million for the three months ended May 4, 2019 and May 5, 2018. Amortization associated with intangible assets subject to amortization at May 4, 2019 is estimated to be $1.9 million for the remainder of fiscal 2019, $2.5 million for fiscal 2020, $2.5 million for fiscal 2021, $1.4 million for fiscal 2022 and $0.3 million for fiscal 2023.

Fair Value Measurements

Fair Value Measurements3 Months Ended
May 04, 2019
Fair Value Measurements
FAIR VALUE MEASUREMENTS14. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value. The hierarchy can be described as follows: Level 1- observable inputs such as quoted prices in active markets; Level 2- inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3- unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
Fair Value Measurements at Reporting Date
Using
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Instruments
Inputs
Inputs
(in thousands)
(Level 1)
(Level 2)
(Level 3)
Total
May 4, 2019—
Assets:
Derivative financial instruments
$

$
$

$
Liabilities:
Derivative financial instruments
$

$
$

$
May 5, 2018—
Assets:
Derivative financial instruments
$

$
$

$
Liabilities:
Derivative financial instruments
$

$
$

$
February 2, 2019—
Assets:
Derivative financial instruments
$

$
$

$
Liabilities:
Derivative financial instruments
$

$
$

$
At May 4, 2019, derivative financial instruments are comprised of (1) interest rate swap agreements to minimize our exposure to interest rate changes on our outstanding indebtedness, (2) foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to forecasted purchases of certain inventories denominated in a currency different from the operating entity’s functional currency and (3) foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to forecasted revenues from our UK operations denominated in a currency different from the UK’s functional currency.
These derivative financial instruments are recorded in the condensed consolidated balance sheets at fair value based upon observable market inputs, primarily pricing models based on current market rates. Derivative financial instruments in an asset position are included within other current assets or other assets in the condensed consolidated balance sheets. Derivative financial instruments in a liability position are included within accrued expenses and other current liabilities or noncurrent liabilities in the condensed consolidated balance sheets. Please see Note 15 for further information regarding our derivative instruments.
Assets and Liabilities that are Measured at Fair Value on a Non-Recurring Basis
Long-lived assets, such as property and equipment, and identifiable intangibles, are periodically evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the asset carrying amount exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset.
During the three months ended May 4, 2019 and May 5, 2018, we incurred $0.2 million and $0.3 million of asset impairment charges, which is included within SG&A expenses in our condensed consolidated statement of earnings, related to underperforming stores.
We estimated the fair value of the long-lived assets based on an income approach using projected future cash flows discounted using a weighted-average cost of capital analysis that reflects current market conditions, which we classify as Level 3 within the fair value hierarchy.
Fair Value of Financial Instruments
Our financial instruments consist of cash, accounts receivable, accounts payable, accrued expenses and other current liabilities and our Term Loan and Senior Notes. Management estimates that, as of May 4, 2019, May 5, 2018, and February 2, 2019, the carrying value of our financial instruments, other than our Term Loan and Senior Notes, approximated their fair value due to the highly liquid or short-term nature of these instruments. We believe that the borrowings under our ABL Facility approximate their fair value because interest rates are adjusted on a short-term basis.
The fair values of our Term Loan were valued based upon observable market data provided by a third party for similar types of debt, which we classify as a Level 2 input within the fair value hierarchy. The fair value of our Senior Notes is based on quoted prices in active markets, which we classify as a Level 1 input within the fair value hierarchy. The table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands):
May 4, 2019
May 5, 2018
February 2, 2019
Carrying
Estimated
Carrying
Estimated
Carrying
Estimated
Amount (1)
Fair Value
Amount (1)
Fair Value
Amount (1)
Fair Value
Term Loan and Senior Notes, including current portion
$
1,111,696
$
1,076,471
$
1,286,508
$
1,321,637
$
1,116,361
$
1,120,296
(1) The carrying value of the Term Loan and Senior Notes, including current portion is net of deferred financing costs of $3.0 million, $10.4 million and $3.2 million as of May 4, 2019, May 5, 2018 and February 2, 2019, respectively.

Derivative Financial Instrument

Derivative Financial Instruments3 Months Ended
May 04, 2019
Derivative Financial Instruments
DERIVATIVE FINANCIAL INSTRUMENTS15. Derivative Financial Instruments
Effective February 3, 2019, we adopted ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities . The adoption of ASU 2017-12 did not have an impact on our financial position, results of operations or cash flows.
In April 2017, we entered into an interest rate swap contract on an initial notional amount of $260.0 million that matures in June 2021 with periodic interest settlements. At May 4, 2019, the notional amount totaled $330.0 million. Under this interest rate swap contract, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 5.31% (including the applicable margin of 3.25%) on the outstanding notional amount.
In June 2018, we entered into an interest rate swap contract on an initial notional amount of $320.0 million that matures in April 2025 with periodic interest settlements. At May 4, 2019, the notional amount totaled $380.0 million. Under this interest rate swap contract, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 6.18% (including the applicable margin of 3.25%) on the outstanding notional amount.
We have designated each interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark rate and the fair value of the swaps is reported as a component of accumulated other comprehensive (loss) income. For both swaps, c hanges in fair value are reclassified from accumulated other comprehensive (loss) income into earnings in the same period that the hedged item affects earnings. Over the next 12 months, $0.9 million of the amounts related to the interest rate swaps is expected to be reclassified from accumulated other comprehensive (loss) income into earnings within interest expense.
We also utilize derivative instruments to hedge our foreign exchange risk, specifically related to the British pound and Euro. At May 4, 2019, the notional amount of the British pound and Euro instruments totaled $24.7 million and $7.8 million, respectively, and mature at various times through December 2019. We have designated these instruments as cash flow hedges of the variability in exchange rates for those foreign currencies. The fair value of these hedges is reported as a component of accumulated other comprehensive (loss) income and changes in fair value are reclassified from accumulated other comprehensive (loss) income into earnings in the same period that the hedged item affects earnings. Over the next 12 months, $0.7 million of the amounts related to these cash flow hedges is expected to be reclassified as expense into cost of sales from accumulated other comprehensive (loss) income.
In addition, we are exposed to market risk associated with foreign currency exchange rate fluctuations as a result of our direct sourcing programs, specifically related to the Canadian dollar. As a result, from time to time, we may enter into derivative instruments to hedge this foreign exchange risk. At May 4, 2019, the notional amount of these instruments totaled $5.7 million. We have not elected to apply hedge accounting to these derivative instruments. Amounts related to these transactions were immaterial to our condensed consolidated financial statements.
The following table provides details on our derivative instruments recorded in the condensed consolidated balance sheets as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4, 2019
May 5, 2018
February 2, 2019
Balance
Estimated
Balance
Estimated
Balance
Estimated
Sheet Location
Fair Value
Sheet Location
Fair Value
Sheet Location
Fair Value
Interest rate contracts
Other current assets
$
1,154
Other current assets
$
1,018
Other current assets
$
1,610
Interest rate contracts
Other assets
489
Other assets
4,341
Other assets
1,355
Foreign exchange contracts
Other current assets
221
Other current assets
280
Other current assets
109
Total assets
$
1,864
$
5,639
$
3,074
Interest rate contracts
Accrued expenses and other current liabilities
$
2,084
Accrued expenses and other current liabilities
$

Accrued expenses and other current liabilities
$
1,625
Interest rate contracts
Deferred taxes, net and other liabilities
12,719
Deferred taxes, net and other liabilities

Deferred taxes, net and other liabilities
7,605
Foreign exchange contracts
Accrued expenses and other current liabilities

Accrued expenses and other current liabilities
83
Accrued expenses and other current liabilities
77
Total liabilities
$
14,803
$
83
$
9,307
The following table provides details on our derivative instruments recorded in the condensed consolidated statements of earnings and comprehensive (loss) income for the three months ended May 4, 2019 and May 5, 2018 (in thousands):
Amount of Gain/(Loss) Recognized in Other Comprehensive Loss, net of tax
Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings
Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings
For the Three Months Ended
For the Three Months Ended
May 4, 2019
May 5, 2018
May 4, 2019
May 5, 2018
Derivatives in Cash Flow Hedging Relationships:
Interest rate contracts
$
(5,195)
$
1,040
Interest expense
$
14
$
154
Foreign exchange contracts
97
1,047
Cost of sales
(530)
559
Total
$
$
$
$

Segment Reporting

Segment Reporting3 Months Ended
May 04, 2019
SEGMENT REPORTING
SEGMENT REPORTING16. Segment Reporting
Our operations are conducted in two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities.
The retail segment includes the results from our four retail merchandising brands: Men's Wearhouse/Men's Wearhouse and Tux, Jos. A. Bank, Moores Clothing for Men ("Moores") and K&G. These four brands are operating segments that have been aggregated into the retail reportable segment. Prior to its divestiture, MW Cleaners was also aggregated in the retail segment as its operations did not have a significant effect on our revenues or expenses. Specialty apparel merchandise offered by our four retail merchandising concepts include suits, suit separates, sport coats, slacks, formalwear, business casual, denim, sportswear, outerwear, dress shirts, shoes and accessories for men. Women's career and casual apparel, sportswear and accessories, including shoes, and children's apparel is offered at most of our K&G stores. Rental product is offered at our Men's Wearhouse/Men's Wearhouse and Tux, Jos. A. Bank and Moores retail stores.
The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Dimensions, Alexandra, and Yaffy in the UK and Twin Hill in the U.S., which provide corporate apparel uniforms and workwear to workforces.
We measure segment profitability based on operating income, defined as income before interest expense, interest income, loss on extinguishment of debt, net and income taxes, before shared service expenses. Shared service expenses include costs incurred and directed primarily by our corporate offices that are not allocated to segments.
Additional net sales information is as follows (in thousands):
For the Three Months Ended
May 4, 2019
May 5, 2018
Net sales:
Men's Wearhouse (1)
$
427,772
$
447,809
Jos. A. Bank
166,886
169,076
K&G
87,697
89,280
Moores
42,307
46,127
MW Cleaners (2)

2,551
Total retail segment
724,662
754,843
Total corporate apparel segment
56,725
63,121
Total net sales
$
$
(1)
Consists of Men's Wearhouse, Men's Wearhouse and Tux and Joseph Abboud.
(2)
On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information.
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands):
For the Three Months Ended
May 4, 2019
May 5, 2018
Operating income:
Retail
$
78,191
$
98,721
Corporate apparel
580
1,583
Shared service expense
(48,469)
(47,407)
Operating income
30,302
52,897
Interest income
96
85
Interest expense
(18,663)
(21,981)
Loss on extinguishment of debt, net

(12,711)
Earnings before income taxes
$
$
Total assets by reportable segment and shared services are as follows (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Segment assets:
Retail
$
2,253,710
$
1,423,995
$
1,375,902
Corporate apparel
187,775
205,715
175,488
Shared services (1)
323,968
316,112
269,100
Total assets (2)
$
2,765,453
$
1,945,822
$
(1)
Shared service assets consist primarily of cash and cash equivalents, assets related to our distribution network and tax-related assets.
(2)
The increase in total assets, as of May 4, 2019, is related to the recognition of operating lease right-of-use assets resulting from the adoption of ASC 842, effective February 3, 2019. Please see Note 12 for additional information.

Legal Matters

Legal Matters3 Months Ended
May 04, 2019
COMMITMENTS AND CONTINGENCIES
Legal Matters17. Legal Matters
On February 17, 2016, Anthony Oliver filed a putative class action lawsuit against our Men's Wearhouse subsidiary in the United States District Court for the Central District of California (Case No. 2:16-cv-01100). The complaint attempts to allege claims under the Telephone Consumer Protection Act. In particular the complaint alleges that the Company sent unsolicited text messages to cellular telephones beginning October 1, 2013 to the present day. After we demonstrated that the Company had the plaintiff's permission to send him texts, the plaintiff filed an amended complaint alleging the Company sent text messages exceeding the number plaintiff had agreed to receive each week. The parties filed cross-motions for summary judgment on what constitutes a “week” and the Court recently issued an order granting the plaintiff’s motion and denying our motion on what period constitutes a “week.” On or about August 17, 2018, we entered into a settlement agreement for an immaterial amount consisting of a combination of cash and coupons. The Court approved the settlement and we consider this matter closed.
On August 2, 2017, two American Airlines employees, Thor Zurbriggen and Dena Catan, filed a putative class action lawsuit against our Twin Hill subsidiary in the United States District Court for the Northern District of Illinois (Case No. 1:17-cv-05648). The complaint alleged claims for strict liability, negligence, and medical monitoring based on allegedly defective uniforms Twin Hill supplied to American Airlines for its employees. On September 28, 2017, the plaintiffs filed an amended complaint adding nine additional named plaintiffs, adding American Airlines, Inc. as a defendant, and adding claims for civil battery and intentional infliction of emotional distress. Plaintiffs filed a Seconded Amended Complaint on October 4, 2018 on behalf of 39 named plaintiffs, adding PSA Airlines, Inc. and Envoy Air Inc. as defendants, adding new factual allegations and adding a new claim of fraud against American. The Second Amended Complaint included plaintiffs from the Onody (Case No. 1:18-cv-02303) and Joy (Case No. 1:18-cv-05808) matters we reported in prior filings. As a result, on October 16, 2018, the judge dismissed the separate Onody and Joy matters. We have timely answered the Second Amended Complaint and the matter will proceed in due course. We believe that any lawsuit filed on the basis of the safety of the Twin Hill uniforms supplied to American Airlines is without merit, and we intend to contest this action vigorously. Twin Hill has substantial and convincing evidence of the uniforms' safety and fitness for their intended purpose, and we believe that there is no evidence linking any of the plaintiffs' alleged injuries to our uniforms. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows.
On September 27, 2017, Heather Poole and numerous other American Airlines employees filed a lawsuit against our Twin Hill subsidiary in the Superior Court for the State of California for the County of Alameda (Case No. RG17876798). The complaint attempts to allege claims for strict liability and negligence based on allegedly defective uniforms Twin Hill supplied to American Airlines for its employees. On December 11, 2017, the Company filed a demurrer to Plaintiff’s complaint. On February 20, 2018, the Court granted our demurrer and dismissed the plaintiffs’ Complaint. Plaintiffs filed an amended complaint on April 10, 2018 and again on April 27, 2018, which added allegations regarding Plaintiffs’ alleged injuries and named Tailored Brands as a defendant. This case was consolidated for pretrial purposes only with other complaints containing identical allegations, including the Agnello, Hughes, Mackonochie and Wagoner cases that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019. We believe that any lawsuit filed on the basis of the safety of the Twin Hill uniforms supplied to American Airlines is without merit, and we intend to contest this action vigorously. Twin Hill has substantial and convincing evidence of the uniforms' safety and fitness for their intended purpose, and we believe that there is no evidence linking any of the plaintiffs' alleged injuries to our uniforms. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows.
In addition, we are involved in various routine legal proceedings, including ongoing litigation, incidental to the conduct of our business. Management does not believe that any of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

Condensed Consolidating Informa

Condensed Consolidating Information3 Months Ended
May 04, 2019
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
Condensed Consolidating Information18. Condensed Consolidating Information
As discussed in Note 4, The Men's Wearhouse (the "Issuer") issued $600.0 million in aggregate principal amount of Senior Notes. The Senior Notes are guaranteed jointly and severally, on an unsecured basis by Tailored Brands, Inc. (the "Parent") and certain of our U.S. subsidiaries (the "Guarantors"). Our foreign subsidiaries (collectively, the "Non-Guarantors") are not guarantors of the Senior Notes. Each of the Guarantors is 100% owned and all guarantees are joint and several. In addition, the guarantees are full and unconditional except for certain automatic release provisions related to the Guarantors.
These automatic release provisions are considered customary and include the sale or other disposition of all or substantially all of the assets or all of the capital stock of any subsidiary guarantor, the release or discharge of a guarantor's guarantee of the obligations under the Term Loan other than a release or discharge through payment thereon, the designation in accordance with the Indenture of a guarantor as an unrestricted subsidiary or the satisfaction of the requirements for defeasance or discharge of the Senior Notes as provided for in the Indenture.
The tables in the following pages present the condensed consolidating financial information for the Parent, the Issuer, the Guarantors and the Non-Guarantors, together with eliminations, as of and for the periods indicated. The consolidating financial information may not necessarily be indicative of the financial positions, results of operations or cash flows had the Issuer, Guarantors and Non-Guarantors operated as independent entities.
Tailored Brands, Inc.
Condensed Consolidating Balance Sheet
May 4, 2019
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$

$
2,183
$
2,181
$
25,385
$

$
29,749
Accounts receivable, net

30,420
198,709
73,193
(221,699)
80,623
Inventories

158,236
508,423
207,753

874,412
Other current assets

11,821
28,760
20,823
(11,500)
49,904
Total current assets

202,660
738,073
327,154
(233,199)
1,034,688
Property and equipment, net

188,799
205,847
33,734

428,380
Operating lease right-of-use assets

497,803
393,007
65,160

955,970
Rental product, net

80,358
9,576
13,961

103,895
Goodwill

6,160
52,128
20,676

78,964
Intangible assets, net


146,984
9,630

156,614
Investments in subsidiaries
161,131
1,218,358


(1,379,489)

Other assets

6,091
596
4,755
(4,500)
6,942
Total assets
$
161,131
$
2,200,229
$
1,546,211
$
475,070
$
(1,617,188)
$
2,765,453
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable
$
153,249
$
124,061
$
89,060
$
73,821
$
(221,699)
$
218,492
Accrued expenses and other current liabilities
4,973
211,236
87,843
40,192
(11,500)
332,744
Current portion of operating lease liabilities

96,742
72,403
13,866

183,011
Current portion of long-term debt

9,000



9,000
Total current liabilities
158,222
441,039
249,306
127,879
(233,199)
743,247
Long-term debt, net

1,151,196



1,151,196
Operating lease liabilities

426,659
325,652
52,584

804,895
Deferred taxes, net and other liabilities
6,955
20,204
28,785
18,717
(4,500)
70,161
Shareholders' (deficit) equity
(4,046)
161,131
942,468
275,890
(1,379,489)
(4,046)
Total liabilities and shareholders' (deficit) equity
$
161,131
$
2,200,229
$
1,546,211
$
475,070
$
(1,617,188)
$
2,765,453
Tailored Brands, Inc.
Condensed Consolidating Balance Sheet
May 5, 2018
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$

$
42,740
$
2,830
$
47,596
$

$
93,166
Accounts receivable, net

32,045
305,987
82,311
(332,932)
87,411
Inventories

175,630
482,648
185,393

843,671
Other current assets
2,784
15,505
47,364
4,284

69,937
Total current assets
2,784
265,920
838,829
319,584
(332,932)
1,094,185
Property and equipment, net

196,932
206,794
34,218

437,944
Rental product, net

102,286
10,127
16,331

128,744
Goodwill

6,160
53,422
45,220

104,802
Intangible assets, net


154,960
12,360

167,320
Investments in subsidiaries
97,019
1,381,326


(1,478,345)

Other assets

11,450
668
81,544
(80,835)
12,827
Total assets
$
99,803
$
1,964,074
$
1,264,800
$
509,257
$
(1,892,112)
$
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable
$
116,382
$
255,384
$
82,563
$
71,481
$
(332,932)
$
192,878
Accrued expenses and other current liabilities
14,868
172,654
125,516
39,116

352,154
Current portion of long-term debt

9,000



9,000
Total current liabilities
131,250
437,038
208,079
110,597
(332,932)
554,032
Long-term debt, net

1,277,508



1,277,508
Deferred taxes, net and other liabilities
5,774
152,509
46,910
27,145
(80,835)
151,503
Shareholders' (deficit) equity
(37,221)
97,019
1,009,811
371,515
(1,478,345)
(37,221)
Total liabilities and shareholders' (deficit) equity
$
99,803
$
1,964,074
$
1,264,800
$
509,257
$
(1,892,112)
$
1,945,822
Tailored Brands, Inc.
Condensed Consolidating Balance Sheet
February 2, 2019
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$

$
970
$
1,496
$
52,965
$

$
55,431
Accounts receivable, net

23,954
264,884
82,204
(297,969)
73,073
Inventories

149,923
461,153
219,350

830,426
Other current assets

30,699
37,969
7,314
(5,270)
70,712
Total current assets

205,546
765,502
361,833
(303,239)
1,029,642
Property and equipment, net

194,290
209,814
35,068

439,172
Rental product, net

81,809
3,426
14,535

99,770
Goodwill

6,160
52,128
21,203

79,491
Intangible assets, net


153,712
10,189

163,901
Investments in subsidiaries
160,057
1,234,005


(1,394,062)

Other assets

7,590
665
5,059
(4,800)
8,514
Total assets
$
160,057
$
1,729,400
$
1,185,247
$
447,887
$
(1,702,101)
$
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
142,701
$
201,799
$
69,485
$
112,963
$
(297,969)
$
228,979
Accrued expenses and other current liabilities
6,697
146,683
109,654
40,233
(5,270)
297,997
Current portion of long-term debt

11,619



11,619
Total current liabilities
149,398
360,101
179,139
153,196
(303,239)
538,595
Long-term debt, net

1,153,242



1,153,242
Deferred taxes, net and other liabilities
7,028
56,000
45,069
21,725
(4,800)
125,022
Shareholders' equity
3,631
160,057
961,039
272,966
(1,394,062)
3,631
Total liabilities and shareholders' equity
$
160,057
$
1,729,400
$
1,185,247
$
447,887
$
(1,702,101)
$
Tailored Brands, Inc.
Condensed Consolidating Statement of Earnings (Loss)
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Three Months Ended May 4, 2019
Net sales
$

$
426,123
$
413,108
$
176,599
$
(234,443)
$
781,387
Cost of sales

228,071
326,923
140,280
(234,443)
460,831
Gross margin

198,052
86,185
36,319

320,556
Operating expenses
844
139,646
134,833
28,648
(13,717)
290,254
Operating (loss) income
(844)
58,406
(48,648)
7,671
13,717
30,302
Other income and expenses, net


13,717

(13,717)

Interest (expense) income, net
(1,155)
(18,479)
1,475
(408)

(18,567)
(Loss) earnings before income taxes
(1,999)
39,927
(33,456)
7,263

11,735
(Benefit) provision for income taxes
(466)
8,067
(5,081)
2,073

4,593
(Loss) earnings before equity in net income of subsidiaries
(1,533)
31,860
(28,375)
5,190

7,142
Equity in earnings (loss) of subsidiaries
8,675
(23,185)


14,510

Net earnings (loss)
$
7,142
$
8,675
$
(28,375)
$
5,190
$
14,510
$
7,142
Comprehensive (loss) income
$
(57)
$
3,494
$
(28,375)
$
3,172
$
21,709
$
(57)
Three Months Ended May 5, 2018
Net sales
$

$
446,247
$
381,421
$
127,667
$
(137,371)
$
817,964
Cost of sales

224,973
290,943
94,195
(137,371)
472,740
Gross margin

221,274
90,478
33,472

345,224
Operating expenses
882
137,273
138,395
28,443
(12,666)
292,327
Operating (loss) income
(882)
84,001
(47,917)
5,029
12,666
52,897
Other income and expenses, net


12,666

(12,666)

Interest (expense) income, net
(764)
(23,666)
2,014
520

(21,896)
Loss on extinguishment of debt, net

(12,711)



(12,711)
(Loss) earnings before income taxes
(1,646)
47,624
(33,237)
5,549

18,290
(Benefit) provision for income taxes
(658)
11,073
(8,011)
1,977

4,381
(Loss) earnings before equity in net income of subsidiaries
(988)
36,551
(25,226)
3,572

13,909
Equity in earnings (loss) of subsidiaries
14,897
(21,654)


6,757

Net earnings (loss)
$
13,909
$
14,897
$
(25,226)
$
3,572
$
6,757
$
13,909
Comprehensive income (loss)
$
2,566
$
16,091
$
(25,226)
$
(8,965)
$
18,100
$
2,566
Tailored Brands, Inc.
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended May 4, 2019
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Net cash provided by (used in) operating activities
$
10,103
$
133,345
$
12,909
$
(134,973)
$
(9,590)
$
11,794
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures

(7,742)
(12,224)
(1,725)

(21,691)
Intercompany activities

(121,430)

(11,500)
132,930

Net cash used in investing activities

(129,172)
(12,224)
(13,225)
132,930
(21,691)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on new term loan

(4,870)



(4,870)
Proceeds from asset-based revolving credit facility

399,500



399,500
Payments on asset-based revolving credit facility

(399,500)



(399,500)
Intercompany activities

1,910

121,430
(123,340)

Cash dividends paid
(9,590)




(9,590)
Proceeds from issuance of common stock
427




427
Tax payments related to vested deferred stock units
(940)




(940)
Net cash (used in) provided by financing activities
(10,103)
(2,960)

121,430
(123,340)
(14,973)
Effect of exchange rate changes



(812)

(812)
Increase (decrease) in cash and cash equivalents

1,213
685
(27,580)

(25,682)
Cash and cash equivalents at beginning of period

970
1,496
52,965

55,431
Cash and cash equivalents at end of period
$

$
2,183
$
2,181
$
25,385
$

$
29,749
Tailored Brands, Inc.
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended May 5, 2018
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Net cash provided by (used in) operating activities
$
10,994
$
196,189
$
(10,744)
$
(66,593)
$
(9,618)
$
120,228
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures

(3,238)
(6,338)
(1,404)

(10,980)
Proceeds from divestiture of business


17,732


17,732
Intercompany activities

(68,425)


68,425

Net cash (used in) provided by investing activities

(71,663)
11,394
(1,404)
68,425
6,752
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on original term loan

(993,420)



(993,420)
Proceeds from new term loan

895,500



895,500
Payments on new term loan

(2,250)



(2,250)
Proceeds from asset-based revolving credit facility

1,500



1,500
Payments on asset-based revolving credit facility

(1,500)



(1,500)
Repurchase and retirement of senior notes

(18,240)



(18,240)
Deferred financing costs

(5,576)



(5,576)
Intercompany activities

(9,618)

68,425
(58,807)

Cash dividends paid
(9,618)




(9,618)
Proceeds from issuance of common stock
3,649




3,649
Tax payments related to vested deferred stock units
(5,025)




(5,025)
Net cash (used in) provided by financing activities
(10,994)
(133,604)

68,425
(58,807)
(134,980)
Effect of exchange rate changes



(2,441)

(2,441)
(Decrease) increase in cash and cash equivalents

(9,078)
650
(2,013)

(10,441)
Cash and cash equivalents at beginning of period

51,818
2,180
49,609

103,607
Cash and cash equivalents at end of period
$

$
42,740
$
2,830
$
47,596
$

$
93,166

Significant Accounting Polici_2

Significant Accounting Policies (Policies)3 Months Ended
May 04, 2019
Significant Accounting Policies
Basis of PresentationBasis of Presentation — The condensed consolidated financial statements herein include the accounts of Tailored Brands, Inc. and its subsidiaries (the "Company") and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented.
Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended February 2, 2019.
Unless the context otherwise requires, "Company", "we", "us" and "our" refer to Tailored Brands, Inc. and its subsidiaries.
The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates.
Recent Accounting Pronouncements Not Yet AdoptedRecent Accounting Pronouncements Not Yet Adopted — We have considered all new accounting pronouncements not yet adopted and have concluded there are no new pronouncements that may have a material impact on our financial position, results of operations, or cash flows, based on current information, except for those listed below.
In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for public companies for annual reporting periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of ASU 2018-15 is permitted. We are currently evaluating the impact ASU 2018-15 may have on our financial position, results of operations or cash flows .

Earnings Per Share (Tables)

Earnings Per Share (Tables)3 Months Ended
May 04, 2019
Earnings Per Share
Computation of basic and diluted earnings per common shareThe following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share amounts):
For the Three Months Ended
May 4,
May 5,
2019
2018
Numerator
Net earnings
$
7,142
$
13,909
Denominator
Basic weighted-average common shares outstanding
50,280
49,458
Dilutive effect of share-based awards
307
1,262
Diluted weighted-average common shares outstanding
50,587
50,720
Net earnings per common share:
Basic
$
0.14
$
0.28
Diluted
$
0.14
$
0.27

Debt (Tables)

Debt (Tables)3 Months Ended
May 04, 2019
Debt
Schedule of long-term debtThe following table provides details on our long-term debt as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Term Loan (net of unamortized OID of $0.0 million at May 4, 2019, $4.5 million at May 5, 2018, and $0.0 million at February 2, 2019)
$
886,130
$
893,299
$
891,000
Senior Notes
228,607
403,607
228,607
ABL Facility
48,500

48,500
Less: Deferred financing costs related to the Term Loan and Senior Notes
(3,041)
(10,398)
(3,246)
Total long-term debt, net
1,160,196
1,286,508
1,164,861
Current portion of long-term debt
(9,000)
(9,000)
(11,619)
Total long-term debt, net of current portion
$
1,151,196
$
1,277,508
$
1,153,242

Revenue Recognition (Tables)

Revenue Recognition (Tables)3 Months Ended
May 04, 2019
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Schedule of disaggregation of revenueThe following table depicts the disaggregation of revenue by major source (in thousands):
For the Three Months Ended
May 4, 2019
May 5, 2018
Net sales:
Men's tailored clothing product
$
342,955
$
355,737
Men's non-tailored clothing product
228,982
235,606
Women's clothing product
19,214
19,582
Other (1)
3,628
2,719
Total retail clothing product
594,779
613,644
Rental services
93,740
100,227
Alteration services
36,143
38,421
Retail dry cleaning services (2)

2,551
Total alteration and other services
36,143
40,972
Total retail sales
724,662
754,843
Corporate apparel clothing product
56,725
63,121
Total net sales
$
$
(1)
Other consists of franchise and licensing revenues and gift card breakage. Franchise revenues are generally recognized at a point in time while licensing revenues consist primarily of minimum guaranteed royalty amounts recognized over an elapsed time period.
(2)
On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information.
Schedule of opening and closing balance of contract liabilitiesThe following table summarizes the opening and closing balances of our contract liabilities (in thousands):
Balance at
Increase
Balance at
February 2, 2019
(Decrease)
May 4, 2019
Contract liabilities
$
122,828
$
43,074
$
165,902
Balance at
Increase
Balance at
February 3, 2018
(Decrease)
May 5, 2018
As Adjusted
Contract liabilities
$
141,552
$
46,791
$
188,343
Cumulative adjustment upon ASC 606 adoption (see Note 5)
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Schedule of cumulative effect of changes in adoption of ASU 606The following table depicts the cumulative effect of the changes made to our February 3, 2018 balance sheet for the adoption of ASC 606 (in thousands):
Reported
Adjusted
Balance at
Impact of
Balance at
February 3,
Adoption of
February 3,
2018
ASC 606
2018
Assets:
Accounts receivable, net
$
79,783
$
(303)
$
79,480
Inventories
851,931
(17,837)
834,094
Other current assets
78,252
2,753
81,005
Liabilities:
Accrued expenses and other current liabilities
285,537
32,378
317,915
Deferred taxes, net and other liabilities
164,191
(11,941)
152,250
Equity:
Accumulated deficit
(479,166)
(35,824)
(514,990)

Supplemental Cash Flows (Tables

Supplemental Cash Flows (Tables)3 Months Ended
May 04, 2019
Supplemental Cash Flows
Schedule of supplemental disclosure of cash flow informationSupplemental disclosure of cash flow information is as follows (in thousands):
For the Three Months Ended
May 4,
May 5,
2019
2018
Cash paid for interest
$
13,763
$
13,380
Cash paid for income taxes, net
$
6,455
$
2,128

Inventories (Tables)

Inventories (Tables)3 Months Ended
May 04, 2019
INVENTORIES
Schedule of inventoriesThe following table provides details on our inventories as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Finished goods
$
745,607
$
749,746
$
682,610
Raw materials and merchandise components
128,805
93,925
147,816
Total inventories
$
874,412
$
843,671
$
830,426

Other Current Assets, Accrued_2

Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Tables)3 Months Ended
May 04, 2019
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities
Other current assetsThe following table provides details on our other current assets as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Prepaid expenses
$
33,850
$
44,438
$
56,361
Tax receivable
5,090
12,814
584
Other
10,964
12,685
13,767
Total other current assets
$
49,904
$
69,937
$
70,712
Accrued expenses and other current liabilitiesThe following table provides details on our accrued expenses and other current liabilities as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Customer deposits, prepayments and refunds payable
$
85,985
$
87,849
$
40,620
Accrued salary, bonus, sabbatical, vacation and other benefits
54,528
56,066
81,503
Loyalty program liabilities
44,893
65,597
44,434
Sales, value added, payroll, property and other taxes payable
37,821
37,605
25,547
Unredeemed gift cards
28,352
29,921
32,178
Accrued workers compensation and medical costs
22,357
24,639
23,974
Accrued dividends
9,993
10,870
10,480
Accrued interest
6,241
10,608
1,828
Accrued royalties
1,270
4,009
1,286
Other
25,381
23,250
20,179
Total accrued expenses and other current liabilities
$
316,821
$
350,414
$
282,029
Deferred taxes, net and other liabilitiesThe following table provides details on our deferred taxes, net and other liabilities as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Deferred and other income tax liabilities, net
$
52,948
$
83,357
$
53,479
Deferred rent and landlord incentives

58,957
57,505
Unfavorable lease liabilities

2,631
1,797
Other
17,213
6,558
12,241
Total deferred taxes, net and other liabilities
$
70,161
$
151,503
$
125,022

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive (Loss) Income (Tables)3 Months Ended
May 04, 2019
Accumulated Other Comprehensive (Loss) Income
Summary of components of accumulated other comprehensive (loss) incomeThe following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended May 4, 2019 (in thousands and net of tax):
Foreign
Currency
Cash Flow
Pension
Translation
Hedges
Plan
Total
BALANCE— February 2, 2019
$
(29,820)
$
(4,314)
$
155
$
(33,979)
Other comprehensive loss before reclassifications
(1,585)
(5,098)

(6,683)
Amounts reclassified from accumulated other comprehensive loss

(516)

(516)
Net current-period other comprehensive loss
(1,585)
(5,614)

(7,199)
BALANCE— May 4, 2019
$
(31,405)
$
(9,928)
$
155
$
(41,178)
The following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended May 5, 2018 (in thousands and net of tax):
Foreign
Currency
Cash Flow
Pension
Translation
Hedges
Plan
Total
BALANCE— February 3, 2018
$
(11,116)
$
145
$
189
$
(10,782)
Other comprehensive (loss) income before reclassifications
(14,143)
2,087

(12,056)
Amounts reclassified from accumulated other comprehensive income

713

713
Net current-period other comprehensive (loss) income
(14,143)
2,800

(11,343)
BALANCE— May 5, 2018
$
(25,259)
$
2,945
$
189
$
(22,125)

Share-Based Compensation Plans

Share-Based Compensation Plans (Tables)3 Months Ended
May 04, 2019
Summary of time-based and performance-based awards activityWeighted-Average
Units
Grant-Date Fair Value
Time-
Performance-
Time-
Performance-
Based
Based
Based
Based
Non-Vested at February 2, 2019
939,086
336,906
$
22.60
$
18.59
Granted




Vested (1)
(326,826)
(28,686)
Forfeited
(55,406)
(23,755)
Non-Vested at May 4, 2019
556,854
284,465
$
$
(1)
Includes 121,995 shares relinquished for tax payments related to vested DSUs for the three months ended May 4, 2019.
Stock Options
Summary of activityWeighted-
Number of
Average
Shares
Exercise Price
Outstanding at February 2, 2019
1,252,072
$
23.64
Granted
3,042,310
Exercised


Forfeited
(30,286)
Expired
(32,271)
Outstanding at May 4, 2019
4,231,825
$
Exercisable at May 4, 2019
818,982
$
Stock Appreciation Rights ("SARs")
Summary of activityWeighted-
Number of
Average
Shares
Exercise Price
Outstanding at February 2, 2019

$

Granted
414,476
Exercised


Forfeited


Expired


Outstanding at May 4, 2019
414,476
$
Exercisable at May 4, 2019

$
Weighted-average assumptions used to calculate fair value of stock optionsFor the Three Months Ended
May 4,
2019
Risk-free interest rate
Expected lives
5.0 years
Dividend yield
Expected volatility
Cash Settled Awards
Summary of share-based compensation of cash settled awardsThe following table summarizes the activity of cash settled awards, based on their initial grant date values, for the three months ended May 4, 2019 (in thousands):
Cash Settled Awards
Non-Vested at February 2, 2019
$
5,072
Granted
4,237
Vested

Forfeited
(199)
Non-Vested at May 4, 2019
$
9,110

Leases (Tables)

Leases (Tables)3 Months Ended
May 04, 2019
Leases
Summary of components of lease costThe components of lease cost are as follows (in thousands):
For the Three Months Ended
May 4, 2019
Operating lease cost
$
62,904
Variable lease cost
19,261
Total lease cost
$
82,165
Summary of supplemental balance sheet information related to leasesSupplemental balance sheet information related to operating leases consists of the following (in thousands):
May 4, 2019
Operating lease right-of-use assets
$
955,970
Current portion of operating lease liabilities
$
183,011
Noncurrent portion operating lease liabilities
804,895
Total operating lease liabilities
$
987,906
Summary of lease term and discount rateLease term and discount rate for operating leases were as follows:
May 4, 2019
Weighted average remaining lease term
4.2 years
Weighted average discount rate
5.29%
Summary of supplemental disclosures of cash flow informationSupplemental disclosures of cash flow information consists of the following (in thousands):
For the Three Months Ended
May 4, 2019
Cash paid for operating leases
$
63,656
Operating lease assets obtained in exchange for operating lease liabilities
$
1,005,762
Summary of the undiscounted annual future minimum lease paymentsThe following table summarizes the undiscounted annual future minimum lease payments, as of May 4, 2019, for each of the next five years and in the aggregate (in thousands):
Operating Leases
Year 1
$
Year 2
Year 3
Year 4
Year 5
Thereafter
Total lease payments
$
Less: Interest
(165,995)
Present value of lease liabilities
$
Minimum future rental payments under non-cancelable operating leasesAs previously disclosed in our 2018 Annual Report on Form 10-K and under the accounting standards then in effect, minimum future rental payments under non-cancelable leases as of February 2, 2019 for each of the next five years and in the aggregate are as follows (in thousands):
Fiscal Year
Operating Leases
2019
$
239,711
2020
209,596
2021
175,962
2022
134,208
2023
88,187
Thereafter
141,084
Total lease payments
$
Cumulative adjustment upon ASC 842 adoption (see Note 12)
Leases
Summary of cumulative effect of the changes made to our February 2, 2019 balance sheetThe following table depicts the cumulative effect of the changes made to our February 2, 2019 balance sheet for the adoption of ASC 842 effective on February 3, 2019 (in thousands):
Reported
Adjusted
Balance at
Impact of
Balance at
February 2,
Adoption of
February 3,
2019
ASC 842
2019
Assets:
Other current assets
$
70,712
$
(20,754)
$
49,958
Operating lease right-of-use assets

896,270
896,270
Intangible assets, net
163,901
(6,682)
157,219
Current Liabilities:
Accrued expenses and other current liabilities
282,029
(151)
281,878
Current portion of operating lease liabilities

183,726
183,726
Noncurrent Liabilities:
Operating lease liabilities

745,116
745,116
Deferred taxes, net and other liabilities
125,022
(59,455)
65,567
Equity:
Accumulated deficit
(468,048)
(402)
(468,450)

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)3 Months Ended
May 04, 2019
GOODWILL AND INTANGIBLE ASSETS
Changes in the net carrying amount of goodwillChanges in the net carrying amount of goodwill, all of which relates to our retail segment, for the three months ended May 4, 2019 are as follows (in thousands):
Total
Balance at February 2, 2019
$
79,491
Translation adjustment
(527)
Balance at May 4, 2019
$
78,964
Gross carrying amount and accumulated amortization of identifiable intangible assetsThe gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Amortizable intangible assets:
Carrying amount:
Trademarks, tradenames and franchise agreements
$
16,074
$
16,155
$
16,067
Favorable leases

12,967
11,844
Customer relationships
26,623
27,477
26,553
Total carrying amount
42,697
56,599
54,464
Accumulated amortization:
Trademarks, tradenames and franchise agreements
(10,877)
(10,594)
(10,796)
Favorable leases

(5,178)
(5,162)
Customer relationships
(19,455)
(17,790)
(18,851)
Total accumulated amortization
(30,332)
(33,562)
(34,809)
Total amortizable intangible assets, net
12,365
23,037
19,655
Indefinite-lived intangible assets:
Trademarks and tradename
144,249
144,283
144,246
Total intangible assets, net
$
156,614
$
167,320
$
163,901

Fair Value Measurements (Tables

Fair Value Measurements (Tables)3 Months Ended
May 04, 2019
Fair Value Measurements
Assets and Liabilities that are Measured at Fair Value on a Recurring BasisFair Value Measurements at Reporting Date
Using
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Instruments
Inputs
Inputs
(in thousands)
(Level 1)
(Level 2)
(Level 3)
Total
May 4, 2019—
Assets:
Derivative financial instruments
$

$
$

$
Liabilities:
Derivative financial instruments
$

$
$

$
May 5, 2018—
Assets:
Derivative financial instruments
$

$
$

$
Liabilities:
Derivative financial instruments
$

$
$

$
February 2, 2019—
Assets:
Derivative financial instruments
$

$
$

$
Liabilities:
Derivative financial instruments
$

$
$

$
Schedule of fair value and carrying value of long-term debt, including current portionThe table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands):
May 4, 2019
May 5, 2018
February 2, 2019
Carrying
Estimated
Carrying
Estimated
Carrying
Estimated
Amount (1)
Fair Value
Amount (1)
Fair Value
Amount (1)
Fair Value
Term Loan and Senior Notes, including current portion
$
1,111,696
$
1,076,471
$
1,286,508
$
1,321,637
$
1,116,361
$
1,120,296
(1) The carrying value of the Term Loan and Senior Notes, including current portion is net of deferred financing costs of $3.0 million, $10.4 million and $3.2 million as of May 4, 2019, May 5, 2018 and February 2, 2019, respectively.

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)3 Months Ended
May 04, 2019
Derivative Financial Instruments
Schedule of derivative instruments recorded in the condensed consolidated balance sheetsThe following table provides details on our derivative instruments recorded in the condensed consolidated balance sheets as of May 4, 2019, May 5, 2018 and February 2, 2019 (in thousands):
May 4, 2019
May 5, 2018
February 2, 2019
Balance
Estimated
Balance
Estimated
Balance
Estimated
Sheet Location
Fair Value
Sheet Location
Fair Value
Sheet Location
Fair Value
Interest rate contracts
Other current assets
$
1,154
Other current assets
$
1,018
Other current assets
$
1,610
Interest rate contracts
Other assets
489
Other assets
4,341
Other assets
1,355
Foreign exchange contracts
Other current assets
221
Other current assets
280
Other current assets
109
Total assets
$
1,864
$
5,639
$
3,074
Interest rate contracts
Accrued expenses and other current liabilities
$
2,084
Accrued expenses and other current liabilities
$

Accrued expenses and other current liabilities
$
1,625
Interest rate contracts
Deferred taxes, net and other liabilities
12,719
Deferred taxes, net and other liabilities

Deferred taxes, net and other liabilities
7,605
Foreign exchange contracts
Accrued expenses and other current liabilities

Accrued expenses and other current liabilities
83
Accrued expenses and other current liabilities
77
Total liabilities
$
14,803
$
83
$
9,307
Schedule of derivative instruments recorded in the condensed consolidated statements of earnings and comprehensive income (loss)The following table provides details on our derivative instruments recorded in the condensed consolidated statements of earnings and comprehensive (loss) income for the three months ended May 4, 2019 and May 5, 2018 (in thousands):
Amount of Gain/(Loss) Recognized in Other Comprehensive Loss, net of tax
Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings
Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings
For the Three Months Ended
For the Three Months Ended
May 4, 2019
May 5, 2018
May 4, 2019
May 5, 2018
Derivatives in Cash Flow Hedging Relationships:
Interest rate contracts
$
(5,195)
$
1,040
Interest expense
$
14
$
154
Foreign exchange contracts
97
1,047
Cost of sales
(530)
559
Total
$
$
$
$

Segment Reporting (Tables)

Segment Reporting (Tables)3 Months Ended
May 04, 2019
SEGMENT REPORTING
Net sales by brand and reportable segmentAdditional net sales information is as follows (in thousands):
For the Three Months Ended
May 4, 2019
May 5, 2018
Net sales:
Men's Wearhouse (1)
$
427,772
$
447,809
Jos. A. Bank
166,886
169,076
K&G
87,697
89,280
Moores
42,307
46,127
MW Cleaners (2)

2,551
Total retail segment
724,662
754,843
Total corporate apparel segment
56,725
63,121
Total net sales
$
$
(1)
Consists of Men's Wearhouse, Men's Wearhouse and Tux and Joseph Abboud.
(2)
On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information.
Operating income (loss) by reportable segment, shared service expense, and the reconciliation to earnings before income taxesOperating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands):
For the Three Months Ended
May 4, 2019
May 5, 2018
Operating income:
Retail
$
78,191
$
98,721
Corporate apparel
580
1,583
Shared service expense
(48,469)
(47,407)
Operating income
30,302
52,897
Interest income
96
85
Interest expense
(18,663)
(21,981)
Loss on extinguishment of debt, net

(12,711)
Earnings before income taxes
$
$
Total assets by reportable segment and shared servicesTotal assets by reportable segment and shared services are as follows (in thousands):
May 4,
May 5,
February 2,
2019
2018
2019
Segment assets:
Retail
$
2,253,710
$
1,423,995
$
1,375,902
Corporate apparel
187,775
205,715
175,488
Shared services (1)
323,968
316,112
269,100
Total assets (2)
$
2,765,453
$
1,945,822
$
(1)
Shared service assets consist primarily of cash and cash equivalents, assets related to our distribution network and tax-related assets.
(2)
The increase in total assets, as of May 4, 2019, is related to the recognition of operating lease right-of-use assets resulting from the adoption of ASC 842, effective February 3, 2019. Please see Note 12 for additional information.

Condensed Consolidating Infor_2

Condensed Consolidating Information (Tables)3 Months Ended
May 04, 2019
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
Condensed Consolidating Balance SheetTailored Brands, Inc.
Condensed Consolidating Balance Sheet
May 4, 2019
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$

$
2,183
$
2,181
$
25,385
$

$
29,749
Accounts receivable, net

30,420
198,709
73,193
(221,699)
80,623
Inventories

158,236
508,423
207,753

874,412
Other current assets

11,821
28,760
20,823
(11,500)
49,904
Total current assets

202,660
738,073
327,154
(233,199)
1,034,688
Property and equipment, net

188,799
205,847
33,734

428,380
Operating lease right-of-use assets

497,803
393,007
65,160

955,970
Rental product, net

80,358
9,576
13,961

103,895
Goodwill

6,160
52,128
20,676

78,964
Intangible assets, net


146,984
9,630

156,614
Investments in subsidiaries
161,131
1,218,358


(1,379,489)

Other assets

6,091
596
4,755
(4,500)
6,942
Total assets
$
161,131
$
2,200,229
$
1,546,211
$
475,070
$
(1,617,188)
$
2,765,453
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable
$
153,249
$
124,061
$
89,060
$
73,821
$
(221,699)
$
218,492
Accrued expenses and other current liabilities
4,973
211,236
87,843
40,192
(11,500)
332,744
Current portion of operating lease liabilities

96,742
72,403
13,866

183,011
Current portion of long-term debt

9,000



9,000
Total current liabilities
158,222
441,039
249,306
127,879
(233,199)
743,247
Long-term debt, net

1,151,196



1,151,196
Operating lease liabilities

426,659
325,652
52,584

804,895
Deferred taxes, net and other liabilities
6,955
20,204
28,785
18,717
(4,500)
70,161
Shareholders' (deficit) equity
(4,046)
161,131
942,468
275,890
(1,379,489)
(4,046)
Total liabilities and shareholders' (deficit) equity
$
161,131
$
2,200,229
$
1,546,211
$
475,070
$
(1,617,188)
$
2,765,453
Tailored Brands, Inc.
Condensed Consolidating Balance Sheet
May 5, 2018
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$

$
42,740
$
2,830
$
47,596
$

$
93,166
Accounts receivable, net

32,045
305,987
82,311
(332,932)
87,411
Inventories

175,630
482,648
185,393

843,671
Other current assets
2,784
15,505
47,364
4,284

69,937
Total current assets
2,784
265,920
838,829
319,584
(332,932)
1,094,185
Property and equipment, net

196,932
206,794
34,218

437,944
Rental product, net

102,286
10,127
16,331

128,744
Goodwill

6,160
53,422
45,220

104,802
Intangible assets, net


154,960
12,360

167,320
Investments in subsidiaries
97,019
1,381,326


(1,478,345)

Other assets

11,450
668
81,544
(80,835)
12,827
Total assets
$
99,803
$
1,964,074
$
1,264,800
$
509,257
$
(1,892,112)
$
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable
$
116,382
$
255,384
$
82,563
$
71,481
$
(332,932)
$
192,878
Accrued expenses and other current liabilities
14,868
172,654
125,516
39,116

352,154
Current portion of long-term debt

9,000



9,000
Total current liabilities
131,250
437,038
208,079
110,597
(332,932)
554,032
Long-term debt, net

1,277,508



1,277,508
Deferred taxes, net and other liabilities
5,774
152,509
46,910
27,145
(80,835)
151,503
Shareholders' (deficit) equity
(37,221)
97,019
1,009,811
371,515
(1,478,345)
(37,221)
Total liabilities and shareholders' (deficit) equity
$
99,803
$
1,964,074
$
1,264,800
$
509,257
$
(1,892,112)
$
1,945,822
Tailored Brands, Inc.
Condensed Consolidating Balance Sheet
February 2, 2019
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$

$
970
$
1,496
$
52,965
$

$
55,431
Accounts receivable, net

23,954
264,884
82,204
(297,969)
73,073
Inventories

149,923
461,153
219,350

830,426
Other current assets

30,699
37,969
7,314
(5,270)
70,712
Total current assets

205,546
765,502
361,833
(303,239)
1,029,642
Property and equipment, net

194,290
209,814
35,068

439,172
Rental product, net

81,809
3,426
14,535

99,770
Goodwill

6,160
52,128
21,203

79,491
Intangible assets, net


153,712
10,189

163,901
Investments in subsidiaries
160,057
1,234,005


(1,394,062)

Other assets

7,590
665
5,059
(4,800)
8,514
Total assets
$
160,057
$
1,729,400
$
1,185,247
$
447,887
$
(1,702,101)
$
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
142,701
$
201,799
$
69,485
$
112,963
$
(297,969)
$
228,979
Accrued expenses and other current liabilities
6,697
146,683
109,654
40,233
(5,270)
297,997
Current portion of long-term debt

11,619



11,619
Total current liabilities
149,398
360,101
179,139
153,196
(303,239)
538,595
Long-term debt, net

1,153,242



1,153,242
Deferred taxes, net and other liabilities
7,028
56,000
45,069
21,725
(4,800)
125,022
Shareholders' equity
3,631
160,057
961,039
272,966
(1,394,062)
3,631
Total liabilities and shareholders' equity
$
160,057
$
1,729,400
$
1,185,247
$
447,887
$
(1,702,101)
$
Condensed Consolidating Statement of Earnings (Loss)Tailored Brands, Inc.
Condensed Consolidating Statement of Earnings (Loss)
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Three Months Ended May 4, 2019
Net sales
$

$
426,123
$
413,108
$
176,599
$
(234,443)
$
781,387
Cost of sales

228,071
326,923
140,280
(234,443)
460,831
Gross margin

198,052
86,185
36,319

320,556
Operating expenses
844
139,646
134,833
28,648
(13,717)
290,254
Operating (loss) income
(844)
58,406
(48,648)
7,671
13,717
30,302
Other income and expenses, net


13,717

(13,717)

Interest (expense) income, net
(1,155)
(18,479)
1,475
(408)

(18,567)
(Loss) earnings before income taxes
(1,999)
39,927
(33,456)
7,263

11,735
(Benefit) provision for income taxes
(466)
8,067
(5,081)
2,073

4,593
(Loss) earnings before equity in net income of subsidiaries
(1,533)
31,860
(28,375)
5,190

7,142
Equity in earnings (loss) of subsidiaries
8,675
(23,185)


14,510

Net earnings (loss)
$
7,142
$
8,675
$
(28,375)
$
5,190
$
14,510
$
7,142
Comprehensive (loss) income
$
(57)
$
3,494
$
(28,375)
$
3,172
$
21,709
$
(57)
Three Months Ended May 5, 2018
Net sales
$

$
446,247
$
381,421
$
127,667
$
(137,371)
$
817,964
Cost of sales

224,973
290,943
94,195
(137,371)
472,740
Gross margin

221,274
90,478
33,472

345,224
Operating expenses
882
137,273
138,395
28,443
(12,666)
292,327
Operating (loss) income
(882)
84,001
(47,917)
5,029
12,666
52,897
Other income and expenses, net


12,666

(12,666)

Interest (expense) income, net
(764)
(23,666)
2,014
520

(21,896)
Loss on extinguishment of debt, net

(12,711)



(12,711)
(Loss) earnings before income taxes
(1,646)
47,624
(33,237)
5,549

18,290
(Benefit) provision for income taxes
(658)
11,073
(8,011)
1,977

4,381
(Loss) earnings before equity in net income of subsidiaries
(988)
36,551
(25,226)
3,572

13,909
Equity in earnings (loss) of subsidiaries
14,897
(21,654)


6,757

Net earnings (loss)
$
13,909
$
14,897
$
(25,226)
$
3,572
$
6,757
$
13,909
Comprehensive income (loss)
$
2,566
$
16,091
$
(25,226)
$
(8,965)
$
18,100
$
2,566
Condensed Consolidating Statement of Cash FlowsTailored Brands, Inc.
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended May 4, 2019
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Net cash provided by (used in) operating activities
$
10,103
$
133,345
$
12,909
$
(134,973)
$
(9,590)
$
11,794
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures

(7,742)
(12,224)
(1,725)

(21,691)
Intercompany activities

(121,430)

(11,500)
132,930

Net cash used in investing activities

(129,172)
(12,224)
(13,225)
132,930
(21,691)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on new term loan

(4,870)



(4,870)
Proceeds from asset-based revolving credit facility

399,500



399,500
Payments on asset-based revolving credit facility

(399,500)



(399,500)
Intercompany activities

1,910

121,430
(123,340)

Cash dividends paid
(9,590)




(9,590)
Proceeds from issuance of common stock
427




427
Tax payments related to vested deferred stock units
(940)




(940)
Net cash (used in) provided by financing activities
(10,103)
(2,960)

121,430
(123,340)
(14,973)
Effect of exchange rate changes



(812)

(812)
Increase (decrease) in cash and cash equivalents

1,213
685
(27,580)

(25,682)
Cash and cash equivalents at beginning of period

970
1,496
52,965

55,431
Cash and cash equivalents at end of period
$

$
2,183
$
2,181
$
25,385
$

$
29,749
Tailored Brands, Inc.
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended May 5, 2018
(in thousands)
Tailored
The Men’s
Guarantor
Non-Guarantor
Brands, Inc.
Wearhouse, Inc.
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Net cash provided by (used in) operating activities
$
10,994
$
196,189
$
(10,744)
$
(66,593)
$
(9,618)
$
120,228
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures

(3,238)
(6,338)
(1,404)

(10,980)
Proceeds from divestiture of business


17,732


17,732
Intercompany activities

(68,425)


68,425

Net cash (used in) provided by investing activities

(71,663)
11,394
(1,404)
68,425
6,752
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on original term loan

(993,420)



(993,420)
Proceeds from new term loan

895,500



895,500
Payments on new term loan

(2,250)



(2,250)
Proceeds from asset-based revolving credit facility

1,500



1,500
Payments on asset-based revolving credit facility

(1,500)



(1,500)
Repurchase and retirement of senior notes

(18,240)



(18,240)
Deferred financing costs

(5,576)



(5,576)
Intercompany activities

(9,618)

68,425
(58,807)

Cash dividends paid
(9,618)




(9,618)
Proceeds from issuance of common stock
3,649




3,649
Tax payments related to vested deferred stock units
(5,025)




(5,025)
Net cash (used in) provided by financing activities
(10,994)
(133,604)

68,425
(58,807)
(134,980)
Effect of exchange rate changes



(2,441)

(2,441)
(Decrease) increase in cash and cash equivalents

(9,078)
650
(2,013)

(10,441)
Cash and cash equivalents at beginning of period

51,818
2,180
49,609

103,607
Cash and cash equivalents at end of period
$

$
42,740
$
2,830
$
47,596
$

$
93,166

Divestiture of MW Cleaners (Det

Divestiture of MW Cleaners (Details) - USD ($) $ in Thousands3 Months Ended12 Months Ended
May 05, 2018Feb. 02, 2019Feb. 28, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of business $ 17,732
Disposed of by sale | MW Cleaners business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration $ 18,000
Loss on divestiture $ (3,800)
Retail Segment | Disposed of by sale | MW Cleaners business | Selling, general and administrative expenses
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on divestiture $ (3,600)

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Numerator
Net earnings (loss) $ 7,142 $ 13,909
Denominator
Basic weighted-average common shares outstanding (in shares)50,280 49,458
Dilutive effect of share-based awards (in shares)307 1,262
Diluted weighted-average common shares outstanding (in shares)50,587 50,720
Net earnings per common share:
Basic (in dollars per share) $ 0.14 $ 0.28
Diluted (in dollars per share) $ 0.14 $ 0.27

Earnings Per Share - Narrative

Earnings Per Share - Narrative (Details) - shares shares in Millions3 Months Ended
May 04, 2019May 05, 2018
Share-based awards
Antidilutive Securities Excluded from Computation of (Loss) Earnings Per Share
Anti-dilutive shares of common stock excluded from the calculation of diluted earnings (loss) per common share (in shares)2 0.4

DEBT - Summary, Narrative (Deta

DEBT - Summary, Narrative (Details) - USD ($) $ in Millions3 Months Ended12 Months Ended
May 04, 2019Feb. 03, 2018Feb. 02, 2019May 05, 2018Apr. 30, 2018Oct. 28, 2017Jun. 18, 2014
Debt
Maximum quarterly dividends on common stock per debt covenants $ 15 $ 10
Senior Notes
Debt
Aggregate principal amount of debt issued600 $ 600
Interest rate (as a percent)7.00%
2014 Credit Facilities | Original Term Loan
Debt
Aggregate principal amount of debt issued $ 900 $ 1,100
Unamortized OID $ 0 $ 0 $ 4.5 11
2014 Credit Facilities | ABL Facility
Debt
Credit facility $ 550 $ 500

DEBT - Credit Facilities, Narra

DEBT - Credit Facilities, Narrative (Details) $ in Thousands1 Months Ended3 Months Ended
Oct. 31, 2018USD ($)Apr. 30, 2018USD ($)Oct. 28, 2017USD ($)May 04, 2019USD ($)agreementMay 05, 2018USD ($)Feb. 02, 2019USD ($)Jun. 18, 2014USD ($)
Debt
(Loss) gain on extinguishment of debt $ (12,711)
Amended New Term Loan
Debt
Number of interest rate swap agreements | agreement2
Senior Notes
Debt
Aggregate principal amount of debt issued $ 600,000 $ 600,000
(Loss) gain on extinguishment of debt(900)
Senior Notes | Upon the occurrence of certain specific changes of control
Debt
Redemption price as a percentage of the principal amount of debt101.00%
2014 Credit Facilities | Original Term Loan
Debt
Aggregate principal amount of debt issued $ 900,000 1,100,000
Fixed rate on refinanced amount (as a percent)5.00%
Prepayment $ 93,400
Unamortized OID $ 0 $ 4,500 $ 0 11,000
2014 Credit Facilities | Original Term Loan | LIBOR
Debt
Margin added to Base rate (as a percent)3.50%
Floor rate (as a percent)1.00%
2014 Credit Facilities | Amended New Term Loan | LIBOR
Debt
Period for variable rate basis1 month
2014 Credit Facilities | Amended ABL Facility | LIBOR
Debt
Margin added to Base rate (as a percent)1.00%
2014 Credit Facilities | ABL Facility
Debt
Credit facility $ 550,000 $ 500,000
Variable Rate Interest Rate | Original Term Loan
Debt
Aggregate principal amount of debt issued $ 593,400
Fixed Rate Interest Rate | Original Term Loan
Debt
Aggregate principal amount of debt issued $ 400,000
Fixed rate on refinanced amount (as a percent)5.00%
2018 Credit Facilities | Original Term Loan
Debt
(Loss) gain on extinguishment of debt $ (11,900)
2018 Credit Facilities | Amended New Term Loan
Debt
Reduction in the interest rate margin0.25%
Total variable interest rate (as a percent)5.72%
Deferred financing costs $ 1,100
Weighted average interest rate (as a percent)5.77%
2018 Credit Facilities | Amended New Term Loan | LIBOR
Debt
Margin added to Base rate (as a percent)3.25%3.25%
Actual LIBOR rate (as a percent)2.47%
2018 Credit Facilities | Amended New Term Loan | Base Rate
Debt
Margin added to Base rate (as a percent)2.25%
2018 Credit Facilities | Amended New Term Loan | Interest rate swap
Debt
Notional amount of interest rate swaps $ 710,000
Percentage of variable interest rate converted to a fixed rate80.00%
2018 Credit Facilities | New Term Loan
Debt
Aggregate principal amount of debt issued $ 900,000
Uncommitted borrowings $ 250,000
Secured leverage ratio2.5
Amortized percentage1.00%
Unamortized OID $ 4,500
2018 Credit Facilities | New Term Loan | LIBOR
Debt
Floor rate (as a percent)1.00%
2018 Credit Facilities | New Term Loan | Base Rate
Debt
Floor rate (as a percent)2.00%
Amended ABL Facility [Member] | Amended ABL Facility
Debt
Weighted average interest rate (as a percent)5.30%
Credit facility550,000
Total credit facility with expansion feature $ 650,000
Fees on unused commitments (as a percent)0.25%
Letters of credit issued and outstanding $ 48,500
Amended ABL Facility [Member] | Amended ABL Facility | Line of Credit
Debt
Letters of credit issued and outstanding38,700
Amended ABL Facility [Member] | Amended ABL Facility | LIBOR
Debt
Period for variable rate basis1 month
Amended ABL Facility [Member] | Amended ABL Facility | Federal funds rate
Debt
Margin added to Base rate (as a percent)0.50%
Amended ABL Facility [Member] | Amended ABL Facility | Minimum
Debt
Fees on amounts available to be drawn (as a percent)1.25%
Amended ABL Facility [Member] | Amended ABL Facility | Maximum
Debt
Varying interest rate margin (as a percent)1.75%
Fees on amounts available to be drawn (as a percent)1.75%
Maximum borrowing outstanding under the ABL Facility during the period100,000
Amended ABL Facility [Member] | ABL Facility
Debt
Borrowings available under credit facility $ 424,900

DEBT - Long Term Debt, Narrativ

DEBT - Long Term Debt, Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended
May 05, 2018Feb. 02, 2019
Debt
(Loss) gain on extinguishment of debt $ (12,711)
Senior Notes
Debt
Partial redemption $ 175,000
Redemption price (in dollars per $1000) $ 1,035
Repurchased and retired17,600
(Loss) gain on extinguishment of debt(900)
Loss upon repurchase(600)
Unamortized deferred financing costs $ (300)

DEBT - Components (Details)

DEBT - Components (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019Feb. 02, 2019Oct. 31, 2018May 05, 2018Apr. 30, 2018Jun. 18, 2014
Debt
Total long-term debt, net $ 1,160,196 $ 1,164,861 $ 1,286,508
Current portion of long-term debt(9,000)(11,619)(9,000)
Total long-term debt, net of current portion1,151,196 1,153,242 1,277,508
Senior Notes
Debt
Long-term debt228,607 228,607 403,607
Amended ABL Facility
Debt
Long-term debt48,500 48,500
New Term Loan
Debt
Mandatory debt payment due to excess cash flow2,600
Term Loan and Senior Notes
Debt
Less: Deferred financing costs(3,041)(3,246)(10,398)
2014 Credit Facilities | Original Term Loan
Debt
Unamortized OID0 0 4,500 $ 11,000
Long-term debt $ 891,000 $ 893,299
2018 Credit Facilities | Amended New Term Loan
Debt
Long-term debt $ 886,130
Less: Deferred financing costs $ (1,100)
2018 Credit Facilities | New Term Loan
Debt
Unamortized OID $ 4,500

REVENUE RECOGNITION - Adoption

REVENUE RECOGNITION - Adoption of ASC 606 (Details) - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018Feb. 03, 2018
Assets
Accounts receivable, net $ 80,623 $ 73,073 $ 87,411
Inventories874,412 830,426 843,671
Other current assets49,904 70,712 69,937
Liabilities
Accrued expenses and other current liabilities316,821 282,029 350,414
Deferred taxes, net and other liabilities70,161 125,022 151,503
Equity:
Accumulated deficit $ (470,411) $ (468,048) $ (510,441)
Cumulative adjustment upon ASC 606 adoption (see Note 5)
Assets
Accounts receivable, net $ 79,480
Inventories834,094
Other current assets81,005
Liabilities
Accrued expenses and other current liabilities317,915
Deferred taxes, net and other liabilities152,250
Equity:
Accumulated deficit(514,990)
Impact of Adoption of ASU 606 | Cumulative adjustment upon ASC 606 adoption (see Note 5)
Assets
Accounts receivable, net(303)
Inventories(17,837)
Other current assets2,753
Liabilities
Accrued expenses and other current liabilities32,378
Deferred taxes, net and other liabilities(11,941)
Equity:
Accumulated deficit(35,824)
Reported Balance | Cumulative adjustment upon ASC 606 adoption (see Note 5)
Assets
Accounts receivable, net79,783
Inventories851,931
Other current assets78,252
Liabilities
Accrued expenses and other current liabilities285,537
Deferred taxes, net and other liabilities164,191
Equity:
Accumulated deficit $ (479,166)

REVENUE RECOGNITION - Disaggreg

REVENUE RECOGNITION - Disaggregation of revenue (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Disaggregation of Revenue [Line Items]
Total net sales $ 781,387 $ 817,964
Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales724,662 754,843
Corporate Apparel Segment
Disaggregation of Revenue [Line Items]
Total net sales56,725 63,121
Rental services | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales93,740 100,227
Retail clothing product | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales594,779 613,644
Men's tailored clothing product | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales342,955 355,737
Men's non-tailored clothing product | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales228,982 235,606
Women's clothing product | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales19,214 19,582
Other | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales3,628 2,719
Total alteration and other services | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales36,143 40,972
Alteration services | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales $ 36,143 38,421
Retail dry cleaning services | Retail Segment
Disaggregation of Revenue [Line Items]
Total net sales $ 2,551

REVENUE RECOGNITION - Other Var

REVENUE RECOGNITION - Other Various Policies (Details)3 Months Ended
May 04, 2019USD ($)item$ / sharesMay 05, 2018USD ($)$ / sharesFeb. 02, 2019USD ($)
Loyalty Program
Points equivalency to dollars spent ratio1
Loyalty point threshold | item500
Amount of rewards certificates $ 50
Period after which reward certificates earned must be redeemed6 months
Accrued liability for loyalty program reward certificates $ 44,893,000 $ 65,597,000 $ 44,434,000
Net of income taxes $ 7,142,000 $ 13,909,000
Diluted (in dollars per share) | $ / shares $ 0.14 $ 0.27
Sales Returns And Allowances For Goods [Abstract]
Refund liability current $ 6,400,000
Right to recover $ 3,300,000

REVENUE RECOGNITION - Contract

REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
REVENUE RECOGNITION
Beginning Balance $ 122,828 $ 141,552
Increase (Decrease)43,074 46,791
Ending Balance165,902 188,343
Revenue recognized included in contract liability balance $ 52,200 $ 41,700

Supplemental Cash Flows (Detail

Supplemental Cash Flows (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Supplemental Cash Flows
Cash paid for interest $ 13,763 $ 13,380
Cash paid for income taxes, net6,455 2,128
Unpaid capital expenditure purchases
Unpaid capital expenditure purchases $ 5,900 $ 4,700

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018
INVENTORIES
Finished goods $ 745,607 $ 682,610 $ 749,746
Raw materials and merchandise components128,805 147,816 93,925
Total inventories $ 874,412 $ 830,426 $ 843,671

INCOME TAXES (Details)

INCOME TAXES (Details)3 Months Ended
May 04, 2019May 05, 2018
INCOME TAXES
Effective income tax rate (as a percent)39.10%24.00%

Other Current Assets, Accrued_3

Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Details) - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018
Other current assets
Prepaid expenses $ 33,850 $ 56,361 $ 44,438
Tax receivable5,090 584 12,814
Other10,964 13,767 12,685
Total other current assets49,904 70,712 69,937
Accrued expenses and other current liabilities
Customer deposits, prepayments and refunds payable85,985 40,620 87,849
Accrued salary, bonus, sabbatical, vacation and other benefits54,528 81,503 56,066
Loyalty program liabilities44,893 44,434 65,597
Sales, value added, payroll, property and other taxes payable37,821 25,547 37,605
Unredeemed gift cards28,352 32,178 29,921
Accrued workers compensation and medical costs22,357 23,974 24,639
Accrued dividends9,993 10,480 10,870
Accrued interest6,241 1,828 10,608
Accrued royalties1,270 1,286 4,009
Other25,381 20,179 23,250
Total accrued expenses and other current liabilities316,821 282,029 350,414
Deferred taxes and other liabilities
Deferred and other income tax liabilities, net52,948 53,479 83,357
Deferred rent and landlord incentives57,505 58,957
Unfavorable lease liabilities1,797 2,631
Other17,213 12,241 6,558
Total deferred taxes, net and other liabilities $ 70,161 $ 125,022 $ 151,503

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Change in accumulated other comprehensive (loss) income components
Balance at the beginning of the period $ 3,631
Balance at the end of the period(4,046) $ (37,221)
Accumulated Other Comprehensive Loss
Change in accumulated other comprehensive (loss) income components
Balance at the beginning of the period(33,979)(10,782)
Other comprehensive (loss) income before reclassifications(6,683)(12,056)
Amounts reclassified from accumulated other comprehensive (loss) income(516)713
Net current-period other comprehensive (loss) income(7,199)(11,343)
Balance at the end of the period(41,178)(22,125)
Foreign Currency Translation
Change in accumulated other comprehensive (loss) income components
Balance at the beginning of the period(29,820)(11,116)
Other comprehensive (loss) income before reclassifications(1,585)(14,143)
Net current-period other comprehensive (loss) income(1,585)(14,143)
Balance at the end of the period(31,405)(25,259)
Cash Flow Hedges
Change in accumulated other comprehensive (loss) income components
Balance at the beginning of the period(4,314)145
Other comprehensive (loss) income before reclassifications(5,098)2,087
Amounts reclassified from accumulated other comprehensive (loss) income(516)713
Net current-period other comprehensive (loss) income(5,614)2,800
Balance at the end of the period(9,928)2,945
Pension Plan
Change in accumulated other comprehensive (loss) income components
Balance at the beginning of the period155 189
Balance at the end of the period $ 155 $ 189

Share-Based Compensation Plan_2

Share-Based Compensation Plans - Deferred Stock Units, Performance Units and Restricted Stock (Details) $ / shares in Units, $ in Millions3 Months Ended
May 04, 2019USD ($)$ / sharesshares
Deferred stock units
Additional information
Shares relinquished for tax withholding121,995
Unrecognized compensation cost
Unrecognized compensation cost, non-vested awards | $ $ 11.7
Compensation recognition period, non-vested awards1 year 4 months 24 days
Time-Based DSUs
Awards
Non-Vested at the beginning of the period (in shares)939,086
Vested (in shares)(326,826)
Forfeited (in shares)(55,406)
Non-Vested at the end of the period (in shares)556,854
Weighted-Average Grant-Date Fair Value
Non-Vested at the beginning of the period (in dollars per share) | $ / shares $ 22.60
Vested (in dollars per share) | $ / shares22.43
Forfeited (in dollars per share) | $ / shares22.88
Non-Vested at the end of the period (in dollars per share) | $ / shares $ 22.77
Performance-Based DSUs
Awards
Non-Vested at the beginning of the period (in shares)336,906
Vested (in shares)(28,686)
Forfeited (in shares)(23,755)
Non-Vested at the end of the period (in shares)284,465
Weighted-Average Grant-Date Fair Value
Non-Vested at the beginning of the period (in dollars per share) | $ / shares $ 18.59
Vested (in dollars per share) | $ / shares17.43
Forfeited (in dollars per share) | $ / shares18.94
Non-Vested at the end of the period (in dollars per share) | $ / shares $ 18.68

Share-Based Compensation Plan_3

Share-Based Compensation Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions3 Months Ended
May 04, 2019May 05, 2018
Share-based compensation
Share-based compensation expense $ 1.9 $ 6.5
Additional disclosures
Weighted-average grant date fair value of stock options granted (in dollars per share) $ 3.01
Stock Options
Number of Shares
Outstanding at the beginning of the period (in shares)1,252,072
Granted (in shares)3,042,310
Forfeited (in shares)(30,286)
Expired (in shares)(32,271)
Outstanding at the end of the period (in shares)4,231,825
Exercisable at the end of the period (in shares)818,982
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share) $ 23.64
Granted (in dollars per share)7.62
Forfeited (in dollars per share)17.47
Expired (in dollars per share)33.79
Outstanding at the end of the period (in dollars per share)12.09
Exercisable at the end of the period (in dollars per share) $ 26.46
Unrecognized compensation cost
Unrecognized compensation cost, non-vested awards $ 12.1
Compensation recognition period, non-vested awards1 year 10 months 24 days
Stock Appreciation Rights ("SARs")
Number of Shares
Granted (in shares)414,476
Outstanding at the end of the period (in shares)414,476
Weighted-Average Exercise Price
Granted (in dollars per share) $ 7.62
Outstanding at the end of the period (in dollars per share) $ 7.62
Assumptions used to value stock options
Risk-free interest rate (as a percent)2.39%
Expected lives (in years)5 years
Dividend yield (as a percent)4.34%
Expected volatility (as a percent)62.32%

Share-Based Compensation Plan_4

Share-Based Compensation Plans - Cash Settled Awards (Details) - USD ($) shares in Thousands, $ in Millions3 Months Ended12 Months Ended
May 04, 2019Feb. 03, 2018
Stock Options
Unrecognized compensation cost
Compensation recognition period, non-vested awards1 year 10 months 24 days
Stock Appreciation Rights ("SARs")
Share-based compensation
Vesting period (in years)3 years
Cash Settled Awards
Share-based compensation
Vesting period (in years)3 years
Liability associated with the cash settled awards $ 3.4
Awards
Non-Vested at the beginning of the period (in shares)5,072
Granted (in shares)4,237
Forfeited (in shares)(199)
Non-Vested at the end of the period (in shares)9,110
Unrecognized compensation cost
Unrecognized compensation cost, non-vested awards $ 4.7
Compensation recognition period, non-vested awards1 year 9 months 18 days
Cash Settled Awards | Accrued expenses and other current liabilities
Share-based compensation
Liability associated with the cash settled awards $ 2.1
Cash Settled Awards | Other Liabilities
Share-based compensation
Liability associated with the cash settled awards $ 1.3

Leases (Details)

Leases (Details) - USD ($) $ in ThousandsFeb. 03, 2019May 04, 2019Feb. 02, 2019May 05, 2018
Practical Expedients [Abstract]
Practical expedients packagetrue
Practical expedients hindsightfalse
Assets
Other current assets $ 49,904 $ 70,712 $ 69,937
Operating lease right-of-use assets955,970
Intangible assets, net156,614 163,901 167,320
Current Liabilities:
Accrued expenses and other current liabilities316,821 282,029 350,414
Current portion of operating lease liabilities183,011
Noncurrent Liabilities:
Noncurrent portion operating lease liabilities804,895
Deferred taxes, net and other liabilities70,161 125,022 151,503
Equity:
Accumulated deficit(470,411)(468,048) $ (510,441)
Adoption Of ASC 842:
Operating lease liabilities987,906
Cumulative adjustment upon ASC 842 adoption (see Note 12)
Assets
Other current assets $ 49,958
Operating lease right-of-use assets896,270
Intangible assets, net157,219
Current Liabilities:
Accrued expenses and other current liabilities281,878
Current portion of operating lease liabilities183,726
Noncurrent Liabilities:
Noncurrent portion operating lease liabilities745,116
Deferred taxes, net and other liabilities65,567
Equity:
Accumulated deficit(468,450)
Adoption Of ASC 842:
Cumulative effect of initially applying ASC 842 $ (402)
Reported Balance | Cumulative adjustment upon ASC 842 adoption (see Note 12)
Assets
Other current assets70,712
Intangible assets, net163,901
Current Liabilities:
Accrued expenses and other current liabilities282,029
Noncurrent Liabilities:
Deferred taxes, net and other liabilities125,022
Equity:
Accumulated deficit $ (468,048)
Impact of Adoption | Cumulative adjustment upon ASC 842 adoption (see Note 12)
Assets
Other current assets(20,754)
Operating lease right-of-use assets896,270
Intangible assets, net(6,682)
Current Liabilities:
Accrued expenses and other current liabilities(151)
Current portion of operating lease liabilities183,726
Noncurrent Liabilities:
Noncurrent portion operating lease liabilities745,116
Deferred taxes, net and other liabilities(59,455)
Equity:
Accumulated deficit(402)
Adoption Of ASC 842:
Operating lease liabilities $ 928,800

Leases - Lease Information (Det

Leases - Lease Information (Details)3 Months Ended
May 04, 2019
Lessee, Lease, Description [Line Items]
Renewal optionstrue
Minimum
Lessee, Lease, Description [Line Items]
Initial term5 years
Renewal term1 year
Maximum
Lessee, Lease, Description [Line Items]
Initial term10 years
Renewal term10 years

Leases - Components of Lease Co

Leases - Components of Lease Cost (Details) $ in Thousands3 Months Ended
May 04, 2019USD ($)
Components of lease cost
Operating lease cost $ 62,904
Variable lease cost19,261
Total lease cost $ 82,165

Leases - Supplemental Balance S

Leases - Supplemental Balance Sheet Information (Details) $ in ThousandsMay 04, 2019USD ($)
Supplemental balance sheet information
Operating lease right-of-use assets $ 955,970
Current portion of operating lease liabilities183,011
Noncurrent portion operating lease liabilities804,895
Total operating lease liabilities $ 987,906

Leases - Lease Term and Discoun

Leases - Lease Term and Discount Rate and Supplemental Disclosures of Cash Flow Information (Details) $ in Thousands3 Months Ended
May 04, 2019USD ($)
Leases
Weighted average remaining lease term4 years 2 months 12 days
Weighted average discount rate5.29%
Cash paid for operating leases $ 63,656
Operating lease assets obtained in exchange for operating lease liabilities1,005,762
Operating lease liabilities987,906
Finance lease $ 0

Leases - Undiscounted Annual Fu

Leases - Undiscounted Annual Future Minimum Lease Payments and Minimum Future Rental Payments (Details) - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019
Leases
Year 1 $ 233,838
Year 2243,151
Year 3212,209
Year 4168,647
Year 5123,415
Thereafter172,641
Total lease payments1,153,901
Less: Interest(165,995)
Present value of lease liabilities987,906
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2019 $ 239,711
2020209,596
2021175,962
2022134,208
202388,187
Thereafter141,084
Total lease payments $ 988,748
Lease yet to commence operating lease liability $ 4,600

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands3 Months Ended
May 04, 2019USD ($)
Changes in the net carrying amount of goodwill
Balance at the beginning of the period $ 79,491
Goodwill impairment charges0
Translation adjustment(527)
Balance at the end of the period $ 78,964

Goodwill and Other Intangible_4

Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018
Amortizable intangible assets:
Carrying amount $ 42,697 $ 54,464 $ 56,599
Accumulated amortization(30,332)(34,809)(33,562)
Total amortizable intangible assets, net12,365 19,655 23,037
Indefinite-lived intangible assets:
Trademarks and tradename144,249 144,246 144,283
Total intangible assets, net156,614 163,901 167,320
Trademarks, tradenames and franchise agreements
Amortizable intangible assets:
Carrying amount16,074 16,067 16,155
Accumulated amortization(10,877)(10,796)(10,594)
Favorable leases
Amortizable intangible assets:
Carrying amount11,844 12,967
Accumulated amortization(5,162)(5,178)
Customer relationships
Amortizable intangible assets:
Carrying amount26,623 26,553 27,477
Accumulated amortization $ (19,455) $ (18,851) $ (17,790)

Goodwill and Other Intangible_5

Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions3 Months Ended
May 04, 2019May 05, 2018
Intangible asset amortization expense
Pre-tax amortization expense associated with intangible assets $ 0.6 $ 1
Pre-tax amortization expense estimated for the remainder of fiscal year 20191.9
Pre-tax amortization expense estimated for fiscal year 20202.5
Pre-tax amortization expense estimated for fiscal year 20212.5
Pre-tax amortization expense estimated for fiscal year 20221.4
Pre-tax amortization expense estimated for fiscal year 2023 $ 0.3

Fair Value Measurements - Recur

Fair Value Measurements - Recurring and Non-Recurring (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018Feb. 02, 2019
Liabilities:
Asset impairment charges $ 184 $ 269
Recurring
Assets:
Derivative financial instruments1,864 5,639 $ 3,074
Liabilities:
Derivative financial instruments14,803 83 9,307
Recurring | Level 2
Assets:
Derivative financial instruments1,864 5,639 3,074
Liabilities:
Derivative financial instruments14,803 83 $ 9,307
Selling, general and administrative expenses
Liabilities:
Asset impairment charges $ 200 $ 300

Fair Value Measurements - Finan

Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018
Fair Value of Financial Instruments
Carrying Amount $ 1,160,196 $ 1,164,861 $ 1,286,508
Deferred financing costs3,000 3,200 10,400
Reported Value Measurement [Member] | Term Loan and Senior Notes | Level 1 and Level 2
Fair Value of Financial Instruments
Carrying Amount1,111,696 1,116,361 1,286,508
Estimate of Fair Value Measurement [Member] | Term Loan and Senior Notes | Level 1 and Level 2
Fair Value of Financial Instruments
Estimated Fair Value $ 1,076,471 $ 1,120,296 $ 1,321,637

Derivative Financial Instrume_3

Derivative Financial Instruments (Details) - USD ($) $ in Millions3 Months Ended
May 04, 2019Jun. 30, 2018Apr. 30, 2017
Interest rate swap | Designated as hedging instruments
Derivative Financial Instruments
Effective portion of the loss expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months $ (0.9)
Interest rate swap matures in June 2021
Derivative Financial Instruments
Notional amount $ 330 $ 260
Fixed rate payable (as a percent)5.31%
Applicable margin included in fixed rate (as a percent)3.25%
Interest rate swap matures in June 2021 | LIBOR
Derivative Financial Instruments
Period for interest rate basis for variable rate receivable1 month
Interest rate swap matures in April 2025
Derivative Financial Instruments
Notional amount $ 380 $ 320
Fixed rate payable (as a percent)6.18%
Applicable margin included in fixed rate (as a percent)3.25%
Interest rate swap matures in April 2025 | LIBOR
Derivative Financial Instruments
Period for interest rate basis for variable rate receivable1 month
Foreign exchange forward | Designated as hedging instruments
Derivative Financial Instruments
Effective portion of the loss expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months $ 0.7
Foreign exchange forward | Designated as hedging instruments | United Kingdom, Pounds
Derivative Financial Instruments
Notional amount24.7
Foreign exchange forward | Designated as hedging instruments | Euro Member Countries, Euro
Derivative Financial Instruments
Notional amount7.8
Foreign exchange forward | Not designated as hedging instrument | Canada, Dollars
Derivative Financial Instruments
Notional amount $ 5.7

Derivative Financial Instrume_4

Derivative Financial Instruments - Estimated fair value (Details) - Designated as hedging instruments - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018
Derivative Financial Instruments
Derivative asset $ 1,864 $ 3,074 $ 5,639
Derivative liability14,803 9,307 83
Other current assets | Interest rate contracts
Derivative Financial Instruments
Interest Rate Cash Flow Hedge Asset at Fair Value1,154 1,610 1,018
Other current assets | Foreign exchange contract
Derivative Financial Instruments
Foreign Currency Fair Value Hedge Asset at Fair Value221 109 280
Other assets | Interest rate contracts
Derivative Financial Instruments
Interest Rate Cash Flow Hedge Asset at Fair Value489 1,355 4,341
Accrued expenses and other current liabilities | Interest rate contracts
Derivative Financial Instruments
Interest Rate Cash Flow Hedge Liability at Fair Value2,084 1,625
Accrued expenses and other current liabilities | Foreign exchange contract
Derivative Financial Instruments
Foreign Currency Fair Value Hedge Liability at Fair Value77 $ 83
Deferred taxes, net and other liabilities | Interest rate contracts
Derivative Financial Instruments
Interest Rate Cash Flow Hedge Liability at Fair Value $ 12,719 $ 7,605

Derivative Financial Instrume_5

Derivative Financial Instruments - Gain loss on derivatives (Details) - Cash flow hedges. - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Derivative Financial Instruments
Other comprehensive (loss) income before reclassifications $ (5,098) $ 2,087
Amounts reclassified from accumulated other comprehensive (loss) income(516)713
Interest rate contracts | Interest Expense
Derivative Financial Instruments
Other comprehensive (loss) income before reclassifications(5,195)1,040
Amounts reclassified from accumulated other comprehensive (loss) income14 154
Foreign exchange contract | Cost of sales
Derivative Financial Instruments
Other comprehensive (loss) income before reclassifications97 1,047
Amounts reclassified from accumulated other comprehensive (loss) income $ (530) $ 559

SEGMENT REPORTING - Number of S

SEGMENT REPORTING - Number of Segments (Details)3 Months Ended
May 04, 2019segment
Segment reporting
Number of reportable segments2
Retail Segment
Segment reporting
Number of operating segments4

SEGMENT REPORTING - Sales by Se

SEGMENT REPORTING - Sales by Segment (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Net sales:
Total net sales $ 781,387 $ 817,964
Retail Segment
Net sales:
Total net sales724,662 754,843
Retail Segment | Men's Wearhouse
Net sales:
Total net sales427,772 447,809
Retail Segment | Jos. A. Bank
Net sales:
Total net sales166,886 169,076
Retail Segment | K&G
Net sales:
Total net sales87,697 89,280
Retail Segment | Moores
Net sales:
Total net sales42,307 46,127
Retail Segment | MW Cleaners
Net sales:
Total net sales2,551
Corporate Apparel Segment
Net sales:
Total net sales $ 56,725 $ 63,121

SEGMENT REPORTING - Operating I

SEGMENT REPORTING - Operating Income Reconciliation (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes
Operating income $ 30,302 $ 52,897
Interest income96 85
Interest expense(18,663)(21,981)
Loss on extinguishment of debt, net(12,711)
(Loss) earnings before income taxes11,735 18,290
Shared services
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes
Operating income(48,469)(47,407)
Retail Segment | Reportable segments
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes
Operating income78,191 98,721
Corporate Apparel Segment | Reportable segments
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes
Operating income $ 580 $ 1,583

SEGMENT REPORTING - Assets by S

SEGMENT REPORTING - Assets by Segment (Details) - USD ($) $ in ThousandsMay 04, 2019Feb. 02, 2019May 05, 2018
Segment reporting
Segment assets $ 2,765,453 $ 1,820,490 $ 1,945,822
Reportable segments | Retail Segment
Segment reporting
Segment assets2,253,710 1,375,902 1,423,995
Reportable segments | Corporate Apparel Segment
Segment reporting
Segment assets187,775 175,488 205,715
Shared services
Segment reporting
Segment assets $ 323,968 $ 269,100 $ 316,112

CONDENSED CONSOLIDATING INFOR_3

CONDENSED CONSOLIDATING INFORMATION - Balance Sheet (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019Feb. 02, 2019May 05, 2018Jun. 18, 2014
CURRENT ASSETS:
Cash and cash equivalents $ 29,749 $ 55,431 $ 93,166
Accounts receivable, net80,623 73,073 87,411
Inventories874,412 830,426 843,671
Other current assets49,904 70,712 69,937
Total current assets1,034,688 1,029,642 1,094,185
Property and equipment, net428,380 439,172 437,944
Operating lease right-of-use assets955,970
Rental product, net103,895 99,770 128,744
Goodwill78,964 79,491 104,802
Intangible assets, net156,614 163,901 167,320
Other assets6,942 8,514 12,827
Total assets2,765,453 1,820,490 1,945,822
CURRENT LIABILITIES:
Accounts payable218,492 228,979 192,878
Accrued expenses and other current liabilities332,744 297,997 352,154
Current portion of operating lease liabilities183,011
Current portion of long-term debt9,000 11,619 9,000
Total current liabilities743,247 538,595 554,032
Long-term debt, net1,151,196 1,153,242 1,277,508
Operating lease liabilities804,895
Deferred taxes, net and other liabilities70,161 125,022 151,503
Shareholders' (deficit) equity(4,046)3,631 (37,221)
Total liabilities and shareholders' (deficit) equity2,765,453 1,820,490 1,945,822
Eliminations
CURRENT ASSETS:
Accounts receivable, net(221,699)(297,969)(332,932)
Other current assets(11,500)(5,270)
Total current assets(233,199)(303,239)(332,932)
Investments in subsidiaries(1,379,489)(1,394,062)(1,478,345)
Other assets(4,500)(4,800)(80,835)
Total assets(1,617,188)(1,702,101)(1,892,112)
CURRENT LIABILITIES:
Accounts payable(221,699)(297,969)(332,932)
Accrued expenses and other current liabilities(11,500)(5,270)
Total current liabilities(233,199)(303,239)(332,932)
Deferred taxes, net and other liabilities(4,500)(4,800)(80,835)
Shareholders' (deficit) equity(1,379,489)(1,394,062)(1,478,345)
Total liabilities and shareholders' (deficit) equity(1,617,188)(1,702,101)(1,892,112)
Senior Notes
Condensed Consolidating Balance Sheet
Aggregate principal amount of debt issued600,000 $ 600,000
Interest rate (as a percent)7.00%
Tailored Brands, Inc. | Reportable Legal Entities
CURRENT ASSETS:
Other current assets2,784
Total current assets2,784
Investments in subsidiaries161,131 160,057 97,019
Total assets161,131 160,057 99,803
CURRENT LIABILITIES:
Accounts payable153,249 142,701 116,382
Accrued expenses and other current liabilities4,973 6,697 14,868
Total current liabilities158,222 149,398 131,250
Deferred taxes, net and other liabilities6,955 7,028 5,774
Shareholders' (deficit) equity(4,046)3,631 (37,221)
Total liabilities and shareholders' (deficit) equity161,131 160,057 99,803
The Men's Wearhouse, Inc. | Reportable Legal Entities
CURRENT ASSETS:
Cash and cash equivalents2,183 970 42,740
Accounts receivable, net30,420 23,954 32,045
Inventories158,236 149,923 175,630
Other current assets11,821 30,699 15,505
Total current assets202,660 205,546 265,920
Property and equipment, net188,799 194,290 196,932
Operating lease right-of-use assets497,803
Rental product, net80,358 81,809 102,286
Goodwill6,160 6,160 6,160
Investments in subsidiaries1,218,358 1,234,005 1,381,326
Other assets6,091 7,590 11,450
Total assets2,200,229 1,729,400 1,964,074
CURRENT LIABILITIES:
Accounts payable124,061 201,799 255,384
Accrued expenses and other current liabilities211,236 146,683 172,654
Current portion of operating lease liabilities96,742
Current portion of long-term debt9,000 11,619 9,000
Total current liabilities441,039 360,101 437,038
Long-term debt, net1,151,196 1,153,242 1,277,508
Operating lease liabilities426,659
Deferred taxes, net and other liabilities20,204 56,000 152,509
Shareholders' (deficit) equity161,131 160,057 97,019
Total liabilities and shareholders' (deficit) equity $ 2,200,229 1,729,400 1,964,074
Guarantor Subsidiaries
Condensed Consolidating Balance Sheet
Ownership of Guarantor subsidiaries (as a percent)100.00%
Guarantor Subsidiaries | Reportable Legal Entities
CURRENT ASSETS:
Cash and cash equivalents $ 2,181 1,496 2,830
Accounts receivable, net198,709 264,884 305,987
Inventories508,423 461,153 482,648
Other current assets28,760 37,969 47,364
Total current assets738,073 765,502 838,829
Property and equipment, net205,847 209,814 206,794
Operating lease right-of-use assets393,007
Rental product, net9,576 3,426 10,127
Goodwill52,128 52,128 53,422
Intangible assets, net146,984 153,712 154,960
Other assets596 665 668
Total assets1,546,211 1,185,247 1,264,800
CURRENT LIABILITIES:
Accounts payable89,060 69,485 82,563
Accrued expenses and other current liabilities87,843 109,654 125,516
Current portion of operating lease liabilities72,403
Total current liabilities249,306 179,139 208,079
Operating lease liabilities325,652
Deferred taxes, net and other liabilities28,785 45,069 46,910
Shareholders' (deficit) equity942,468 961,039 1,009,811
Total liabilities and shareholders' (deficit) equity1,546,211 1,185,247 1,264,800
Non-Guarantor Subsidiaries | Reportable Legal Entities
CURRENT ASSETS:
Cash and cash equivalents25,385 52,965 47,596
Accounts receivable, net73,193 82,204 82,311
Inventories207,753 219,350 185,393
Other current assets20,823 7,314 4,284
Total current assets327,154 361,833 319,584
Property and equipment, net33,734 35,068 34,218
Operating lease right-of-use assets65,160
Rental product, net13,961 14,535 16,331
Goodwill20,676 21,203 45,220
Intangible assets, net9,630 10,189 12,360
Other assets4,755 5,059 81,544
Total assets475,070 447,887 509,257
CURRENT LIABILITIES:
Accounts payable73,821 112,963 71,481
Accrued expenses and other current liabilities40,192 40,233 39,116
Current portion of operating lease liabilities13,866
Total current liabilities127,879 153,196 110,597
Operating lease liabilities52,584
Deferred taxes, net and other liabilities18,717 21,725 27,145
Shareholders' (deficit) equity275,890 272,966 371,515
Total liabilities and shareholders' (deficit) equity $ 475,070 $ 447,887 $ 509,257

CONDENSED CONSOLIDATING INFOR_4

CONDENSED CONSOLIDATING INFORMATION - Earnings (Loss) (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Condensed Consolidating Statement of Earnings (Loss)
Total net sales $ 781,387 $ 817,964
Total cost of sales460,831 472,740
Total gross margin320,556 345,224
Operating expenses290,254 292,327
Operating (loss) income30,302 52,897
Interest income96 85
Interest expense18,663 21,981
Interest (expense) income, net(18,567)(21,896)
(Loss) gain on extinguishment of debt(12,711)
(Loss) earnings before income taxes11,735 18,290
(Benefit) provision for income taxes4,593 4,381
(Loss) earnings before equity in net income of subsidiaries7,142 13,909
Net earnings (loss)7,142 13,909
Comprehensive income (loss)(57)2,566
Eliminations
Condensed Consolidating Statement of Earnings (Loss)
Total net sales(234,443)(137,371)
Total cost of sales(234,443)(137,371)
Operating expenses(13,717)(12,666)
Operating (loss) income13,717 12,666
Other income and expenses, net(13,717)(12,666)
Equity in earnings (loss) of subsidiaries14,510 6,757
Net earnings (loss)14,510 6,757
Comprehensive income (loss)21,709 18,100
Tailored Brands, Inc. | Reportable Legal Entities
Condensed Consolidating Statement of Earnings (Loss)
Operating expenses844 882
Operating (loss) income(844)(882)
Interest (expense) income, net(1,155)(764)
(Loss) earnings before income taxes(1,999)(1,646)
(Benefit) provision for income taxes(466)(658)
(Loss) earnings before equity in net income of subsidiaries(1,533)(988)
Equity in earnings (loss) of subsidiaries8,675 14,897
Net earnings (loss)7,142 13,909
Comprehensive income (loss)(57)2,566
The Men's Wearhouse, Inc. | Reportable Legal Entities
Condensed Consolidating Statement of Earnings (Loss)
Total net sales426,123 446,247
Total cost of sales228,071 224,973
Total gross margin198,052 221,274
Operating expenses139,646 137,273
Operating (loss) income58,406 84,001
Interest (expense) income, net(18,479)(23,666)
(Loss) gain on extinguishment of debt(12,711)
(Loss) earnings before income taxes39,927 47,624
(Benefit) provision for income taxes8,067 11,073
(Loss) earnings before equity in net income of subsidiaries31,860 36,551
Equity in earnings (loss) of subsidiaries(23,185)(21,654)
Net earnings (loss)8,675 14,897
Comprehensive income (loss)3,494 16,091
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Earnings (Loss)
Total net sales413,108 381,421
Total cost of sales326,923 290,943
Total gross margin86,185 90,478
Operating expenses134,833 138,395
Operating (loss) income(48,648)(47,917)
Other income and expenses, net13,717 12,666
Interest (expense) income, net1,475 2,014
(Loss) earnings before income taxes(33,456)(33,237)
(Benefit) provision for income taxes(5,081)(8,011)
(Loss) earnings before equity in net income of subsidiaries(28,375)(25,226)
Net earnings (loss)(28,375)(25,226)
Comprehensive income (loss)(28,375)(25,226)
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Earnings (Loss)
Total net sales176,599 127,667
Total cost of sales140,280 94,195
Total gross margin36,319 33,472
Operating expenses28,648 28,443
Operating (loss) income7,671 5,029
Interest (expense) income, net(408)520
(Loss) earnings before income taxes7,263 5,549
(Benefit) provision for income taxes2,073 1,977
(Loss) earnings before equity in net income of subsidiaries5,190 3,572
Net earnings (loss)5,190 3,572
Comprehensive income (loss) $ 3,172 $ (8,965)

CONDENSED CONSOLIDATING INFOR_5

CONDENSED CONSOLIDATING INFORMATION - Cash Flows (Details) - USD ($) $ in Thousands3 Months Ended
May 04, 2019May 05, 2018
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities $ 11,794 $ 120,228
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(21,691)(10,980)
Proceeds from divestiture of business17,732
Net cash (used in) provided by investing activities(21,691)6,752
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on original term loan(993,420)
Proceeds from new term loan895,500
Payments on new term loan(4,870)(2,250)
Proceeds from asset-based revolving credit facility399,500 1,500
Payments on asset-based revolving credit facility(399,500)(1,500)
Repurchase and retirement of senior notes(18,240)
Deferred financing costs(5,576)
Cash dividends paid(9,590)(9,618)
Proceeds from issuance of common stock427 3,649
Tax payments related to vested deferred stock units(940)(5,025)
Net cash used in financing activities(14,973)(134,980)
Effect of exchange rate changes(812)(2,441)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(25,682)(10,441)
Balance at beginning of period55,431 103,607
Balance at end of period29,749 93,166
Eliminations
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities(9,590)(9,618)
CASH FLOWS FROM INVESTING ACTIVITIES:
Intercompany activities132,930 68,425
Net cash (used in) provided by investing activities132,930 68,425
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activities(123,340)(58,807)
Net cash used in financing activities(123,340)(58,807)
Tailored Brands, Inc. | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities10,103 10,994
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid(9,590)(9,618)
Proceeds from issuance of common stock427 3,649
Tax payments related to vested deferred stock units(940)(5,025)
Net cash used in financing activities(10,103)(10,994)
The Men's Wearhouse, Inc. | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities133,345 196,189
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(7,742)(3,238)
Intercompany activities(121,430)(68,425)
Net cash (used in) provided by investing activities(129,172)(71,663)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on original term loan(993,420)
Proceeds from new term loan895,500
Payments on new term loan(4,870)(2,250)
Proceeds from asset-based revolving credit facility399,500 1,500
Payments on asset-based revolving credit facility(399,500)(1,500)
Repurchase and retirement of senior notes(18,240)
Deferred financing costs(5,576)
Intercompany activities1,910 (9,618)
Net cash used in financing activities(2,960)(133,604)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS1,213 (9,078)
Balance at beginning of period970 51,818
Balance at end of period2,183 42,740
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities12,909 (10,744)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(12,224)(6,338)
Proceeds from divestiture of business17,732
Net cash (used in) provided by investing activities(12,224)11,394
CASH FLOWS FROM FINANCING ACTIVITIES:
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS685 650
Balance at beginning of period1,496 2,180
Balance at end of period2,181 2,830
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities(134,973)(66,593)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(1,725)(1,404)
Intercompany activities(11,500)
Net cash (used in) provided by investing activities(13,225)(1,404)
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activities121,430 68,425
Net cash used in financing activities121,430 68,425
Effect of exchange rate changes(812)(2,441)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(27,580)(2,013)
Balance at beginning of period52,965 49,609
Balance at end of period $ 25,385 $ 47,596