Cover
Cover - shares | May 02, 2020 | May 02, 2020 | Jun. 05, 2020 |
Cover [Abstract] | |||
Document Type | 10-Q | ||
Document Quarterly Report | true | ||
Document Period End Date | May 2, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-12107 | ||
Entity Registrant Name | Abercrombie & Fitch Co. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 31-1469076 | ||
Entity Address, Address Line One | 6301 Fitch Path, | ||
Entity Address, City or Town | New Albany, | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 43054 | ||
City Area Code | (614) | ||
Local Phone Number | 283-6500 | ||
Title of 12(b) Security | Class A Common Stock, $0.01 Par Value | ||
Trading Symbol | ANF | ||
Security Exchange Name | NYSE | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 62,375,867 | ||
Entity Central Index Key | 0001018840 | ||
Current Fiscal Year End Date | --01-30 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Document Period End Date | May 2, 2020 | |
Net sales | $ 485,359 | $ 733,972 |
Cost of sales, exclusive of depreciation and amortization | 221,214 | 289,882 |
Gross profit | 264,145 | 444,090 |
Stores and distribution expense | 322,124 | 356,612 |
Marketing, general and administrative expense | 108,257 | 111,947 |
Flagship store exit charges | (543) | 1,744 |
Asset impairment, exclusive of flagship store exit charges | 42,928 | 1,662 |
Other operating loss (income), net | 506 | (617) |
Operating income (loss) | (209,127) | (27,258) |
Interest expense, net | 3,371 | 616 |
Loss before income taxes | (212,498) | (27,874) |
Income tax expense (benefit) | 31,533 | (9,588) |
Net loss | (244,031) | (18,286) |
Less: Net income attributable to noncontrolling interests | 117 | 869 |
Net loss attributable to A&F | $ (244,148) | $ (19,155) |
Net loss per share attributable to A&F | ||
Basic | $ (3.90) | $ (0.29) |
Diluted | $ (3.90) | $ (0.29) |
Weighted-average shares outstanding | ||
Basic | 62,541 | 66,540 |
Diluted | 62,541 | 66,540 |
Other comprehensive income (loss) | ||
Foreign currency translation, net of tax | $ (5,399) | $ (2,786) |
Derivative financial instruments, net of tax | 8,865 | (53) |
Other comprehensive loss | 3,466 | (2,839) |
Comprehensive loss | (240,565) | (21,125) |
Less: Comprehensive income attributable to noncontrolling interests | 117 | 869 |
Comprehensive loss attributable to A&F | $ (240,682) | $ (21,994) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 |
Current assets: | ||
Cash and equivalents | $ 703,989 | $ 671,267 |
Receivables | 88,639 | 80,251 |
Inventories | 426,594 | 434,326 |
Other current assets | 67,412 | 78,905 |
Total current assets | 1,286,634 | 1,264,749 |
Property and equipment, net | 654,784 | 665,290 |
Operating lease right-of-use assets | 1,133,618 | 1,230,954 |
Other assets | 216,795 | 388,672 |
Total assets | 3,291,831 | 3,549,665 |
Current liabilities: | ||
Accounts payable | 162,747 | 219,919 |
Accrued expenses | 285,799 | 302,214 |
Short-term portion of operating lease liabilities | 307,173 | 282,829 |
Short-term portion of borrowings | 210,000 | 0 |
Income taxes payable | 8,232 | 10,392 |
Total current liabilities | 973,951 | 815,354 |
Long-term liabilities: | ||
Long-term portion of operating lease liabilities | 1,184,448 | 1,252,634 |
Long-term portion of borrowings, net | 232,178 | 231,963 |
Other liabilities | 103,188 | 178,536 |
Total long-term liabilities | 1,519,814 | 1,663,133 |
Stockholders’ equity | ||
Class A Common Stock - $0.01 par value: 150,000 shares authorized and 103,300 shares issued for all periods presented | 1,033 | 1,033 |
Paid-in capital | 389,904 | 404,983 |
Retained earnings | 2,022,366 | 2,313,745 |
Accumulated other comprehensive loss, net of tax | (105,420) | (108,886) |
Treasury stock, at average cost: 41,016 and 40,514 shares as of May 2, 2020 and February 1, 2020, respectively | (1,517,644) | (1,552,065) |
Total Abercrombie & Fitch Co. stockholders’ equity | 790,239 | 1,058,810 |
Noncontrolling interests | 7,827 | 12,368 |
Total stockholders’ equity | 798,066 | 1,071,178 |
Total liabilities and stockholders’ equity | $ 3,291,831 | $ 3,549,665 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | May 02, 2020 | Feb. 01, 2020 |
Stockholders’ equity | ||
Treasury Stock, at Average Cost (in shares) | 41,016,000 | 40,514,000 |
Class A Common Stock | ||
Stockholders’ equity | ||
Class A Common Stock, par value | $ 0.01 | $ 0.01 |
Class A Common Stock, shares authorized | 150,000,000 | 150,000,000 |
Class A Common Stock, shares issued | 103,300,000 | 103,300,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Document Period End Date | May 2, 2020 | |
Operating activities | ||
Net loss | $ (244,031) | $ (18,286) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 44,037 | 41,042 |
Asset impairment | 42,928 | 1,662 |
Loss on disposal | 6,283 | 1,991 |
Benefit from deferred income taxes | 23,353 | (9,895) |
Share-based compensation | 5,162 | 2,632 |
Changes in assets and liabilities: | ||
Inventories | 6,320 | 4,962 |
Accounts payable and accrued expenses | (72,533) | (74,199) |
Operating lease right-of-use assets and liabilities | 20,029 | (10,862) |
Income taxes | (3,982) | 855 |
Other assets | 32,213 | (10,287) |
Withdrawal from Rabbi Trust Assets | 50,000 | 0 |
Other liabilities | (555) | (931) |
Net cash (used for) provided by operating activities | (90,776) | (71,316) |
Investing activities | ||
Purchases of property and equipment | (46,990) | (43,872) |
Net cash used for investing activities | (46,990) | (43,872) |
Financing activities | ||
Purchase of treasury stock | (15,172) | 0 |
Dividends paid | (12,556) | (13,246) |
Proceeds from Short-term Debt | 210,000 | 0 |
Other financing activities | (10,604) | (7,076) |
Net cash used for financing activities | 171,668 | (20,322) |
Effect of exchange rates on cash | (3,891) | (2,638) |
Net decrease in cash and equivalents, and restricted cash and equivalents | 30,011 | (138,148) |
Cash and equivalents, and restricted cash, beginning of period | 692,264 | 745,829 |
Cash and equivalents, and restricted cash and equivalents, end of period | 722,275 | 607,681 |
Supplemental information related to non-cash activities | ||
Purchases of property and equipment not yet paid at end of period | 46,174 | 22,771 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 35,182 | 117,829 |
Supplemental information related to cash activities | ||
Cash paid for interest | 4,387 | 3,881 |
Cash paid for income taxes | 3,714 | 2,872 |
Cash received from income tax refunds | 568 | 7,049 |
Cash paid for operating lease liabilities | $ 66,510 | $ 94,245 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | AOCI Including Portion Attributable to Noncontrolling Interest [Member] | Treasury Stock [Member] |
Shares, Outstanding | 66,227 | 37,073 | |||||
Total Abercrombie & Fitch Co. stockholders’ equity | $ 1,033 | $ 405,379 | $ 2,418,544 | $ (102,452) | $ (1,513,604) | ||
Noncontrolling interests | $ 9,721 | ||||||
Total stockholders' equity | $ 1,218,621 | ||||||
Income (Loss) Attributable to Noncontrolling Interest, before Tax | 869 | ||||||
Net Income (Loss) Attributable to Parent | (19,155) | (19,155) | |||||
Net loss | (18,286) | ||||||
Dividends | (13,246) | (13,246) | |||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 410 | (410) | |||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | (6,288) | (12,037) | (14,631) | $ 20,380 | |||
Share-based compensation expense | (2,632) | (2,632) | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (53) | ||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (2,786) | ||||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | (466) | 466 | |||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | (75,165) | ||||||
Shares, Outstanding | 66,637 | 36,663 | |||||
Total Abercrombie & Fitch Co. stockholders’ equity | $ 1,033 | 395,974 | 2,296,347 | (105,291) | $ (1,493,224) | ||
Noncontrolling interests | 10,124 | ||||||
Total stockholders' equity | 1,104,963 | ||||||
Shares, Outstanding | 62,786 | 40,514 | |||||
Total Abercrombie & Fitch Co. stockholders’ equity | 1,058,810 | $ 1,033 | 404,983 | 2,313,745 | (108,886) | $ (1,552,065) | |
Noncontrolling interests | 12,368 | 12,368 | |||||
Total stockholders' equity | 1,071,178 | ||||||
Income (Loss) Attributable to Noncontrolling Interest, before Tax | 117 | ||||||
Net Income (Loss) Attributable to Parent | (244,148) | (244,148) | |||||
Net loss | (244,031) | ||||||
Treasury Stock, Shares, Acquired | (1,397) | 1,397 | |||||
Treasury Stock, Value, Acquired, Cost Method | (15,172) | $ (15,172) | |||||
Dividends | (12,556) | (12,556) | |||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 895 | (895) | |||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | (5,323) | (20,241) | (34,675) | $ 49,593 | |||
Share-based compensation expense | (5,162) | ||||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 8,865 | ||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (5,399) | ||||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | (4,658) | 4,658 | |||||
Shares, Outstanding | 62,284 | 41,016 | |||||
Total Abercrombie & Fitch Co. stockholders’ equity | 790,239 | $ 1,033 | $ 389,904 | $ 2,022,366 | $ (105,420) | $ (1,517,644) | |
Noncontrolling interests | 7,827 | $ 7,827 | |||||
Total stockholders' equity | $ 798,066 |
Nature of Business (Notes)
Nature of Business (Notes) | 3 Months Ended |
May 02, 2020 | |
Nature of Business [Abstract] | |
Nature of Business | Abercrombie & Fitch Co. (“A&F”), a company incorporated in Delaware in 1996, through its subsidiaries (collectively, A&F and its subsidiaries are referred to as “Abercrombie & Fitch” or the “Company”), is a global multi-brand omnichannel specialty retailer, whose products are sold primarily through its Company-owned store and digital channels, as well as through various third-party wholesale, franchise and licensing arrangements. The Company offers a broad assortment of apparel, personal care products and accessories for men, women and kids under the Hollister, Abercrombie & Fitch and abercrombie kids brands. The brands share a commitment to offering unique products of enduring quality and exceptional comfort that allow customers around the world to express their own individuality and style. The Company primarily has operations in North America, Europe and Asia, among other regions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Accounting Policies [Text Block] | Principles of consolidation The accompanying Condensed Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its financial position, results of operations and cash flows. The Company has interests in an Emirati business venture and in a Kuwaiti business venture with Majid al Futtaim Fashion L.L.C. (“MAF”), each of which meets the definition of a variable interest entity (“VIE”). The Company is deemed to be the primary beneficiary of these VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with MAF’s portion of net income presented as net income attributable to noncontrolling interests (“NCI”) on the Condensed Consolidated Statements of Operations and Comprehensive Loss and MAF’s portion of equity presented as NCI on the Condensed Consolidated Balance Sheets. Fiscal year The Company’s fiscal year ends on the Saturday closest to January 31. This typically results in a fifty-two week year, but occasionally gives rise to an additional week, resulting in a fifty-three week year. Fiscal years are designated in the Condensed Consolidated Financial Statements and notes, as well as the remainder of this Quarterly Report on Form 10-Q, by the calendar year in which the fiscal year commences. All references herein to the Company’s fiscal years are as follows: Fiscal year Year ended Number of weeks Fiscal 2019 February 1, 2020 52 Fiscal 2020 January 30, 2021 52 Interim financial statements The Condensed Consolidated Financial Statements as of May 2, 2020 , and for the thirteen week periods ended May 2, 2020 and May 4, 2019 , are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, the Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in A&F’s Annual Report on Form 10-K for Fiscal 2019 filed with the SEC on March 31, 2020 . The February 1, 2020 consolidated balance sheet data, included herein, were derived from audited consolidated financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments (which are of a normal recurring nature) necessary to state fairly, in all material respects, the financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for Fiscal 2020 . Use of estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Due to the inherent uncertainty involved with estimates, actual results may differ. The extent to which the current outbreak of coronavirus disease (“COVID-19”) impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of the COVID-19 pandemic and its impact on the length or frequency of store closures, and the extent to which COVID-19 will impact worldwide macroeconomic conditions including interest rates, the speed of the anticipated recovery, and governmental, business and consumer reactions to the pandemic. The Company’s assessment of these, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods. Recent accounting pronouncements The Company reviews recent accounting pronouncements on a quarterly basis and has excluded discussion of those not applicable to the Company and those that did not have, or are not expected to have, a material impact on the Company’s consolidated financial statements. Condensed Consolidated Statements of Cash Flows reconciliation The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Condensed Consolidated Statements of Cash Flows: (in thousands) Location May 2, 2020 February 1, 2020 May 4, 2019 February 2, 2019 Cash and equivalents Cash and equivalents $ 703,989 $ 671,267 $ 586,133 $ 723,135 Long-term restricted cash and equivalents Other assets 18,286 18,696 21,548 22,694 Short-term restricted cash and equivalents Other current assets — 2,301 — — Cash and equivalents and restricted cash and equivalents $ 722,275 $ 692,264 $ 607,681 $ 745,829 |
BASIS OF PRESENTATION | Interim financial statements The Condensed Consolidated Financial Statements as of May 2, 2020 , and for the thirteen week periods ended May 2, 2020 and May 4, 2019 , are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, the Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in A&F’s Annual Report on Form 10-K for Fiscal 2019 filed with the SEC on March 31, 2020 . The February 1, 2020 consolidated balance sheet data, included herein, were derived from audited consolidated financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments (which are of a normal recurring nature) necessary to state fairly, in all material respects, the financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for Fiscal 2020 . |
Impact of COVID-19 (Notes)
Impact of COVID-19 (Notes) | 3 Months Ended |
May 02, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | |
Unusual or Infrequent Items, or Both, Disclosure [Text Block] | Recent developments As a result of COVID-19, in January 2020, the Company began to experience business disruptions in the Asia-Pacific (“APAC”) region, including the temporary closure of stores in China and the surrounding area, modified operating hours in certain stores that remained open, and a decline in traffic. In late February 2020, the situation escalated as the scope of COVID-19 worsened beyond the APAC region, with the United States (the “U.S.”) and the Europe, Middle East and Africa (“EMEA”) region experiencing significant outbreaks. In March 2020, the COVID-19 outbreak was declared to be a global pandemic by the World Health Organization. In response to COVID-19, certain governments have imposed travel restrictions and local statutory quarantines. The Company is monitoring and reacting to the COVID-19 situation on a daily basis, including by conforming to local governments’ guidance and recommending associates who are able to perform their role remotely to do so. In mid-March 2020, with the well-being of the Company’s customers, associates and business partners in mind, the Company temporarily closed its Company-operated stores across brands in North America and the EMEA region. The Company began to reopen these stores on a rolling basis beginning in late April 2020. The Company has experienced sales productivity for reopened stores of approximately 80% and 60% for the U.S. and the EMEA region, respectively, since their reopenings as compared to last year’s levels. The majority of the Company’s stores in the APAC region have also reopened, although many with temporarily reduced operating hours. The Company plans to follow the guidance of local governments to determine when it can reopen remaining stores and to evaluate whether further store closures will be necessary. As of June 5, 2020, approximately 58% of Company-operated stores were open. The Company’s digital operations across brands have continued to serve the Company’s customers during this unprecedented period of temporary store closures. The Company experienced 25% digital sales growth for the first quarter of Fiscal 2020 as compared to the first quarter of Fiscal 2019, with month-over-month acceleration in digital sales growth since temporary store closures were enacted in mid-March and through the Company's most recent fiscal month of May. The Company has seen, and may continue to see, material adverse impacts as a result of COVID-19. Current circumstances are dynamic and future impacts, including the duration and impact on overall customer demand, are uncertain. Impact of COVID-19 during the first quarter of Fiscal 2020 The Company has seen, and may continue to see material reductions in sales across brands and regions as a result of COVID-19. Total net sales for the first quarter of Fiscal 2020 decreased approximately 34% as compared to the first quarter of Fiscal 2019. The year-over-year decline was primarily driven by temporary widespread store closures in response to COVID-19, partially offset by digital sales growth of approximately 25% to more than $275 million. As a result of the continued effects of COVID-19 and the temporary closure of the Company’s stores, the Company recognized approximately $14.8 million of charges to reduce the carrying value of inventory in cost of sales, exclusive of depreciation and amortization on the Condensed Consolidated Statements of Operations and Comprehensive Loss during the first quarter of Fiscal 2020. During the first quarter of Fiscal 2020, reductions in revenue have not been offset by proportional decreases in expense, as the Company continued to incur store occupancy costs such as operating lease costs and depreciation expense, and certain other costs such as compensation and administrative expenses, resulting in a negative effect on the relationship between the Company’s costs and revenues. During the thirteen weeks ended May 2, 2020 , the Company suspended rent payments for a significant number of stores, and continues to engage with its landlords. In the period during which rent was due, the Company reclassified related amounts from operating lease liability to accrued expenses, while continuing to recognize operating lease cost in the Condensed Consolidated Statement of Operations and Comprehensive Loss. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which among other things, provides refundable employee retention tax credits for wages paid to employees who are unable to work during the COVID–19 outbreak and the deferral of the employer–paid portion of social security taxes. Similar relief programs have also been established throughout the EMEA and APAC regions. Based on the Company's preliminary evaluation of the CARES Act and legislation across regions, the Company qualifies for certain payroll tax credits, and such government subsidies have been treated as offsets to the related operating expenses when recognized. During the first quarter of Fiscal 2020, the qualified payroll tax credits reduced payroll expenses by approximately $8.8 million on the Condensed Consolidated Statements of Operations and Comprehensive Loss, with $7.9 million of expected relief classified in receivables on the Condensed Consolidated Balance Sheet as of May 2, 2020. The Company intends to continue to defer qualified payroll and other tax payments as permitted by the CARES Act and other regional legislation. The Company also recognized asset impairment charges related to the Company’s right-of-use assets and property and equipment of $42.9 million during the first quarter of Fiscal 2020, which were principally the result of the impact of COVID-19 on store cash flows. Refer to Note 9, “ ASSET IMPAIRMENT ,” for additional information. In addition, the Company has also experienced other material impacts as a result of COVID-19, such as the establishment of deferred tax valuation allowances and other tax charges, adversely impacting results in the first quarter of Fiscal 2020 by approximately $90.9 million . Refer to Note 11, “ INCOME TAXES ,” for additional information. Balance sheet, cash flow and liquidity Throughout the first quarter of Fiscal 2020, the Company took various actions to preserve liquidity and manage cash flows in order to best position the business for key stakeholders, including (i) partnering with merchandise and non-merchandise vendors in regards to payment terms; (ii) reducing and recadencing inventory receipts to better align inventory with expected market demand; (iii) significantly reducing expenses to better align operating costs with sales; and (iv) implementing various compensation actions related to the Company’s store and corporate associates, as well as A&F’s non-associate directors. As a precautionary measure and to improve the Company’s cash position, in March 2020, the Company borrowed $210.0 million under its asset-based senior secured revolving credit facility and withdrew the majority of excess funds from the Company’s overfunded Rabbi Trust assets, which provided the Company with $50.0 million of additional cash. Refer to Note 12, “ BORROWINGS ,” and Note 10 “ RABBI TRUST ASSETS ,” for additional information. In addition, in response to COVID-19, in March 2020, the Company announced that it has temporarily suspended its share repurchase program and in May 2020, the Company announced that it has temporarily suspended its dividend program, in order to preserve liquidity and maintain financial flexibility. The Company will review these temporary suspensions throughout the year to determine, in light of facts and circumstances at that time, whether and when to reinstate these programs. As of May 2, 2020, the Company had liquidity of $763.4 million as compared to $913.8 million as of February 1, 2020, comprising of cash and equivalents and actual incremental borrowing available to the Company under the Amended ABL Facility. |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 3 Months Ended |
May 02, 2020 | |
Revenue Recognition [Abstract] | |
Revenue from Contract with Customer [Text Block] | Disaggregation of revenue All revenues are recognized in net sales in the Condensed Consolidated Statements of Operations and Comprehensive Loss. For information regarding the disaggregation of revenue, refer to Note 16 , “ SEGMENT REPORTING . ” Contract liabilities The following table details certain contract liabilities representing unearned revenue as of May 2, 2020 , February 1, 2020 , May 4, 2019 and February 2, 2019: (in thousands) May 2, 2020 February 1, 2020 May 4, 2019 February 2, 2019 Gift card liability $ 24,671 $ 28,844 $ 22,067 $ 26,062 Loyalty program liability $ 18,814 $ 23,051 $ 19,830 $ 19,904 The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Revenue associated with gift card redemptions and gift card breakage $ 11,009 $ 15,284 Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs $ 5,709 $ 6,518 |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
May 02, 2020 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | Net loss per basic and diluted share attributable to A&F is computed based on the weighted-average number of outstanding shares of Class A Common Stock (“Common Stock”). Additional information pertaining to net loss per share attributable to A&F is as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Shares of Common Stock issued 103,300 103,300 Weighted-average treasury shares (40,759 ) (36,760 ) Weighted-average — basic shares 62,541 66,540 Dilutive effect of share-based compensation awards — — Weighted-average — diluted shares 62,541 66,540 Anti-dilutive shares (1) 2,195 2,812 (1) Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net loss per diluted share because the impact would have been anti-dilutive. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can achieve up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion. |
Fair Value
Fair Value | 3 Months Ended |
May 02, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs to measure fair value are as follows: • Level 1—inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets that the Company can access at the measurement date. • Level 2—inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities, directly or indirectly. • Level 3—inputs to the valuation methodology are unobservable. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The three levels of the hierarchy and the distribution of the Company’s assets and liabilities that are measured at fair value on a recurring basis, were as follows: Assets at Fair Value as of May 2, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 265 $ 23,571 $ — $ 23,836 Rabbi Trust assets (2) 1 59,638 — 59,639 Restricted cash equivalents (3) 6,298 8,050 — 14,348 Total assets $ 6,564 $ 91,259 $ — $ 97,823 Assets and Liabilities at Fair Value as of February 1, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 225 $ 58,447 $ — $ 58,672 Derivative instruments (4) — 1,969 — 1,969 Rabbi Trust assets (2) 1 109,048 — 109,049 Restricted cash equivalents (3) 9,765 4,601 — 14,366 Total assets $ 9,991 $ 174,065 $ — $ 184,056 Liabilities: Derivative instruments (4) $ — $ 1,460 $ — $ 1,460 Total liabilities $ — $ 1,460 $ — $ 1,460 (1) Level 1 assets consist of investments in money market funds. Level 2 assets consist of time deposits. (2) Level 1 assets consist of investments in money market funds. Level 2 assets consist of trust-owned life insurance policies. (3) Level 1 assets consist of investments in U.S. treasury bills and money market funds. Level 2 assets consist of time deposits. (4) Level 2 assets and liabilities consist primarily of foreign currency exchange forward contracts. The Company’s Level 2 assets and liabilities consist of: • Time deposits, which are valued at cost approximating fair value due to the short-term nature of these investments; • Trust-owned life insurance policies which are valued using the cash surrender value of the life insurance policies; and • Derivative instruments, primarily foreign currency exchange forward contracts, which are valued using quoted market prices of the same or similar instruments, adjusted for counterparty risk. Fair value of long-term borrowings The Company’s borrowings under the Company’s term loan facility are carried at historical cost in the accompanying Condensed Consolidated Balance Sheets. The carrying amount and fair value of gross borrowings under the Company’s term loan facility were as follows: (in thousands) May 2, 2020 February 1, 2020 Gross borrowings outstanding, carrying amount $ 233,250 $ 233,250 Gross borrowings outstanding, fair value $ 219,255 $ 233,979 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
May 02, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | Property and equipment, net consisted of: (in thousands) May 2, 2020 February 1, 2020 Property and equipment, at cost $ 2,751,471 $ 2,744,967 Less: Accumulated depreciation and amortization (2,096,687 ) (2,079,677 ) Property and equipment, net $ 654,784 $ 665,290 Refer to Note 9 , “ ASSET IMPAIRMENT ,” for details related to property and equipment impairment charges incurred during the thirteen weeks ended May 2, 2020 and May 4, 2019 . |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
May 02, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | The Company has leases related to its Company-operated retail stores as well as for certain of its distribution centers, office space, information technology and equipment. During the thirteen weeks ended May 2, 2020 , the Company suspended rent payments for a significant number of stores, and continues to engage with its landlords. In the period during which rent was due, the Company reclassified related amounts from operating lease liability to accrued expenses, while continuing to recognize operating lease cost in the Condensed Consolidated Statement of Operations and Comprehensive Loss. The following table provides a summary of the Company’s operating lease costs for the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Single lease cost (1) $ 93,492 $ 92,274 Variable lease cost (2) 27,901 42,845 Operating lease right-of-use asset impairment (3) 35,008 — Total operating lease cost $ 156,401 $ 135,119 (1) Includes amortization and interest expense associated with operating lease right-of-use assets and liabilities. (2) Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs. (3) Refer to Note 9 , “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. As of May 2, 2020 , the Company had minimum commitments related to additional operating lease contracts that have not yet commenced, primarily for its Company-operated retail stores, of approximately $2.6 million . |
Asset Impairment (Notes)
Asset Impairment (Notes) | 3 Months Ended |
May 02, 2020 | |
Asset Impairment [Abstract] | |
Asset Impairment [Text Block] | Asset impairment charges for the thirteen weeks ended May 2, 2020 and May 4, 2019 were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Operating lease right-of-use asset impairment $ 35,008 $ — Property and equipment asset impairment 7,920 1,662 Total asset impairment $ 42,928 $ 1,662 Asset impairment charges for the thirteen weeks ended May 2, 2020 were principally the result of the impact of COVID-19 on store cash flows and were related to certain of the Company’s stores across brands, geographies and store formats. The impairment charge reduced the carrying value of these stores’ assets to their estimated fair value of approximately $127.9 million, including $118.8 million related to operating lease right-of-use assets. Asset impairment charges for the thirteen weeks ended May 4, 2019 , related to certain of the Company’s mall-based stores. The impairment charge reduced the carrying value of these stores’ assets to their estimated fair value of approximately $2.8 million, all of which related to operating lease right-of-use assets. |
Rabbi Trust Assets (Notes)
Rabbi Trust Assets (Notes) | 3 Months Ended |
May 02, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | As a precautionary measure and to preserve liquidity in light of the circumstances surrounding COVID-19, during the thirteen weeks ended May 2, 2020 , the Company withdrew the majority of excess funds from the overfunded Rabbi Trust assets, providing the Company with $50.0 million of additional cash. Investments of Rabbi Trust assets consisted of the following as of May 2, 2020 and February 1, 2020 : (in thousands) May 2, 2020 February 1, 2020 Trust-owned life insurance policies (at cash surrender value) $ 59,638 $ 109,048 Money market funds 1 1 Rabbi Trust assets $ 59,639 $ 109,049 Realized gains resulting from the change in cash surrender value of the Rabbi Trust assets for the thirteen weeks ended May 2, 2020 and May 4, 2019 were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Realized gains related to Rabbi Trust assets $ 590 $ 791 |
Income Taxes
Income Taxes | 3 Months Ended |
May 02, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The quarterly provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The Company’s quarterly provision and the estimate of the annual effective tax rate are subject to significant variation due to several factors. These factors include variability in the pre-tax jurisdictional mix of earnings, changes in how the Company does business including entering into new businesses or geographies, changes in foreign currency exchange rates, changes in laws, regulations, interpretations and administrative practices, relative changes in expenses or losses for which tax benefits are not recognized and the impact of discrete items. In addition, jurisdictions where the Company anticipates an ordinary loss for the fiscal year are excluded from the overall computation of estimated annual effective tax rate and no tax benefit are recognized in the period related to losses in such jurisdictions. The impact of these items on the effective tax rate will be greater at lower levels of pre-tax earnings. Impact of valuation allowances and other tax charges during the first quarter of Fiscal 2020 The Company’s effective tax rate for the first quarter of Fiscal 2020 was impacted by $90.9 million of adverse tax impacts, ultimately giving rise to income tax expense on a consolidated pre-tax loss. Further details regarding these adverse tax impacts are as follows: • The Company anticipates pre-tax losses for the fiscal year in certain jurisdictions, based on information currently available, primarily due to the significant adverse impacts of COVID-19. The Company did not recognize income tax benefits on $212.0 million of pre-tax losses during the first quarter of Fiscal 2020, resulting in an adverse tax impact of $56.6 million . • The Company recognized discrete charges of $34.3 million related to the establishment of valuation allowances and other tax charges in certain jurisdictions during the thirteen weeks ended May 2, 2020, principally as a result of the significant adverse impacts of COVID–19. These charges related to valuation allowances recognized by the Company of $10.5 million and $6.0 million related to the U.S. and Germany, respectively, as well as valuation allowances and other tax charges in certain other jurisdictions against underlying tax asset balances that existed as of February 1, 2020. The Company also recognized valuation allowances of $78.9 million related to Switzerland with a U.S. branch equally offsetting amount, which in net, did not have an impact on the Condensed Consolidated Statement of Operations and Comprehensive Loss. Changes in assumptions may occur based on new information that becomes available resulting in adjustments in the period in which a determination is made. Global legislation in response to COVID-19 In March 2020, the CARES Act was enacted into U.S. law, intended to provide economic relief to those impacted by COVID-19 and enhance business’ liquidity. The Company continues to examine impacts that the CARES Act may have on U.S. income taxes; however, the Company does not currently expect that these provisions will have a material impact on its income taxes. The Company is still assessing the applicability of other recently passed global legislation, including the potential income tax measures offered in other jurisdictions where the Company’s operations have also been impacted by COVID-19. Share-based compensation Refer to Note 13 , “ SHARE-BASED COMPENSATION ,” for details on discrete income tax benefits and charges related to share-based compensation awards during the thirteen weeks ended May 4, 2019 . |
Borrowings
Borrowings | 3 Months Ended |
May 02, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Asset-based revolving credit facility On August 7, 2014, the Company, through its subsidiary Abercrombie & Fitch Management Co. (“A&F Management”) as the lead borrower (with A&F and certain other subsidiaries as borrowers or guarantors), entered into an asset-based revolving credit agreement. On October 19, 2017, the Company, through its subsidiary A&F Management, entered into a Second Amendment to Credit Agreement (the “ABL Second Amendment”), amending and extending the maturity date of the asset-based revolving credit agreement to October 19, 2022. As amended, the asset-based revolving credit agreement continues to provide for a senior secured revolving credit facility of up to $400 million (the “Amended ABL Facility”). As a precautionary measure and to improve the Company’s cash position in light of the circumstances surrounding COVID-19, during the thirteen weeks ended May 2, 2020 , the Company borrowed $210.0 million under the Amended ABL Facility. Borrowings under the Amended ABL Facility as of May 2, 2020 and February 1, 2020 were as follows: (in thousands) May 2, 2020 February 1, 2020 Short-term portion of borrowings, gross at carrying amount $ 210,000 $ — As of May 2, 2020 , the interest rate on borrowings under the Amended ABL Facility was 1.82% . The Amended ABL Facility will mature on October 19, 2022 . As of May 2, 2020 , the Company had availability under the Amended ABL Facility of $89.4 million , net of $0.8 million in outstanding stand-by letters of credit. As the Company must maintain excess availability equal to the greater of 10% of the loan cap or $30 million under the Amended ABL Facility, actual incremental borrowing available to the Company under the Amended ABL Facility was $59.4 million as of May 2, 2020 . The provisions under the credit agreement applicable to the Amended ABL Facility have not changed from those described in Note 12, “BORROWINGS,” in the Notes to Consolidated Financial Statements contained in “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of A&F’s Annual Report on Form 10-K for Fiscal 2019. Term loan facility On August 7, 2014, the Company, through its subsidiary A&F Management as the borrower (with A&F and certain other subsidiaries as guarantors), entered into a term loan agreement, which provides for a term loan facility of $300 million (the “Term Loan Facility” and, together with the Amended ABL Facility, the “Credit Facilities”). On June 22, 2018, A&F, through A&F Management, entered into the Second Amendment to Term Loan Credit Agreement (the “Term Loan Second Agreement”), which served to reprice the Term Loan Facility. As permitted under the credit agreement applicable to the Term Loan Facility, among other things, the Term Loan Second Amendment provided for the issuance by A&F Management of refinancing term loans in an aggregate principal amount of $253.3 million in exchange for the term loans then outstanding under the Term Loan Facility, which resulted in the reduction of the applicable margins for term loans by 0.25% . Additional details on borrowings under the Term Loan Facility as of May 2, 2020 and February 1, 2020 are as follows: (in thousands) May 2, 2020 February 1, 2020 Long-term portion of borrowings, gross at carrying amount $ 233,250 $ 233,250 Unamortized discount (296 ) (355 ) Unamortized fees (776 ) (932 ) Long-term portion of borrowings, net 232,178 231,963 Less: short-term portion of borrowings, net — — Long-term portion of borrowings, net $ 232,178 $ 231,963 The interest rate on borrowings under the Term Loan Facility was 4.50% as of May 2, 2020 . The Term Loan Facility will mature on August 7, 2021 . The provisions under the credit agreement applicable to the Term Loan Facility have not changed from those described in Note 12, “BORROWINGS,” in the Notes to Consolidated Financial Statements contained in “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of A&F’s Annual Report on Form 10-K for Fiscal 2019. Representations, warranties and covenants The Credit Facilities contain various representations, warranties and restrictive covenants that, among other things and subject to specified exceptions, restrict the ability of A&F and its subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, pay dividends or distributions with respect to capital stock, make prepayments on other indebtedness, engage in mergers, dispose of certain assets or change the nature of their business. In addition, excess availability equal to the greater of 10% of the loan cap or $30 million must be maintained under the Amended ABL Facility. The Credit Facilities do not otherwise contain financial maintenance covenants. Both Credit Facilities contain certain affirmative covenants, including reporting requirements such as delivery of financial statements, certificates and notices of certain events, maintaining insurance and providing additional guarantees and collateral in certain circumstances. The Company was in compliance with the covenants under the Credit Facilities as of May 2, 2020 . |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
May 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | Financial statement impact The following table details share-based compensation expense and the related income tax benefit for the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Share-based compensation expense $ 5,162 $ 2,632 Income tax benefit associated with share-based compensation expense recognized (1) $ — $ 550 (1) No income tax benefit was recognized related to share-based compensation expense during the thirteen weeks ended May 2, 2020 due to the U.S. being a loss jurisdiction. The following table details discrete income tax benefits and charges related to share-based compensation awards during the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Income tax discrete benefits realized for tax deductions related to the issuance of shares (1) $ — $ 1,239 Income tax discrete charges realized upon cancellation of stock appreciation rights (1) — (165 ) Total income tax discrete benefits related to share-based compensation awards $ — $ 1,074 (1) No income tax benefits or charges related to these items were recognized during the thirteen weeks ended May 2, 2020 due to the U.S. being a loss jurisdiction. The following table details the amount of employee tax withheld by the Company upon the issuance of shares associated with restricted stock units vesting and the exercise of stock appreciation rights for the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Employee tax withheld upon issuance of shares (1) $ 5,323 $ 6,288 (1) Classified within other financing activities on the Condensed Consolidated Statements of Cash Flows. Restricted stock units The following table summarizes activity for restricted stock units for the thirteen weeks ended May 2, 2020 : Service-based Restricted Performance-based Restricted Market-based Restricted Number of (1) Weighted- Number of Weighted- Number of Weighted- Unvested at February 1, 2020 1,676,831 $ 18.68 747,056 $ 15.11 421,784 $ 23.05 Granted 1,646,771 7.29 — — — — Adjustments for performance achievement — — 38,381 11.37 134,122 11.79 Vested (639,921 ) 18.00 (478,728 ) 9.58 (350,447 ) 11.79 Forfeited (12,881 ) 19.99 (817 ) 17.56 — — Unvested at May 2, 2020 (2) 2,670,800 $ 11.81 305,892 $ 22.39 205,459 $ 34.90 (1) Includes 79,028 unvested restricted stock units as of May 2, 2020 , subject to vesting requirements related to the achievement of certain performance metrics, such as operating income and net income, for the fiscal year immediately preceding the vesting date. Holders of these restricted stock units have the opportunity to earn back one or more installments of the award if the cumulative performance requirements are met in a subsequent year. (2) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Certain unvested shares related to restricted stock units with performance-based vesting conditions can be achieved at up to 200% of their target vesting amount. The following table details unrecognized compensation cost and the remaining weighted-average period these costs are expected to be recognized for restricted stock units as of May 2, 2020 : (in thousands) Service-based Restricted Performance-based Restricted Market-based Restricted Unrecognized compensation cost $ 28,275 $ 161 $ 3,308 Remaining weighted-average period cost is expected to be recognized (years) 1.4 0.1 0.9 Additional information pertaining to restricted stock units for the thirteen weeks ended May 2, 2020 and May 4, 2019 follows: (in thousands) May 2, 2020 May 4, 2019 Service-based restricted stock units: Total grant date fair value of awards granted $ 12,005 $ 14,473 Total grant date fair value of awards vested $ 11,519 $ 10,971 Performance-based restricted stock units: Total grant date fair value of awards granted $ — $ 5,312 Total grant date fair value of awards vested $ 4,586 $ — Market-based restricted stock units: Total grant date fair value of awards granted $ — $ 4,176 Total grant date fair value of awards vested $ 4,132 $ 511 No market-based restricted stock units were granted during the thirteen weeks ended May 2, 2020 . The weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during the thirteen weeks ended May 4, 2019 were as follows: May 4, 2019 Grant date market price $ 25.34 Fair value $ 36.24 Assumptions: Price volatility 57 % Expected term (years) 2.9 Risk-free interest rate 2.2 % Dividend yield 3.2 % Average volatility of peer companies 40.0 % Average correlation coefficient of peer companies 0.2407 Stock appreciation rights The following table summarizes stock appreciation rights activity for the thirteen weeks ended May 2, 2020 : Number of Underlying Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Life (years) Outstanding at February 1, 2020 796,725 $ 40.06 Granted — — Exercised — — Forfeited or expired (162,475 ) 44.86 Outstanding at May 2, 2020 634,250 $ 38.84 $ — 2.6 Stock appreciation rights exercisable at May 2, 2020 634,250 $ 38.84 $ — 2.6 Stock appreciation rights expected to become exercisable in the future as of May 2, 2020 — $ — $ — 0.0 No stock appreciation rights were exercised during the thirteen weeks ended May 2, 2020 . Additional information pertaining to stock appreciation rights for the thirteen weeks ended May 4, 2019 follows: (in thousands) May 4, 2019 Total grant date fair value of awards exercised $ 2,379 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
May 02, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments, primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to engage in currency speculation and does not enter into derivative financial instruments for trading purposes. The Company uses derivative instruments, primarily foreign currency exchange forward contracts designated as cash flow hedges, to hedge the foreign currency exchange rate exposure associated with forecasted foreign currency denominated intercompany inventory sales to foreign subsidiaries and the related settlement of the foreign currency denominated intercompany receivables. Fluctuations in foreign currency exchange rates will either increase or decrease the Company’s intercompany equivalent cash flows and affect the Company’s U.S. Dollar earnings. Gains or losses on the foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed upon settlement date. These foreign currency exchange forward contracts typically have a maximum term of twelve months. The sale of the inventory to the Company’s customers will result in the reclassification of related derivative gains and losses that are reported in accumulated other comprehensive loss (“AOCL”) into earnings. The Company also uses foreign currency exchange forward contracts to hedge certain foreign–currency–denominated net monetary assets/liabilities. Examples of monetary assets/liabilities include cash balances, receivables and payables. Fluctuations in foreign currency exchange rates result in transaction gains or losses being recorded in earnings, as U.S. GAAP requires that monetary assets/liabilities be remeasured at the spot exchange rate at quarter–end or upon settlement. The Company has chosen not to apply hedge accounting to these instruments because there are no differences in the timing of gain or loss recognition on the hedging instruments and the hedged items. The Company did not have any outstanding foreign currency exchange forward contracts as of May 2, 2020. The location and amounts of derivative fair values of foreign currency exchange forward contracts on the Condensed Consolidated Balance Sheet as of February 1, 2020 were as follows: (in thousands) Location February 1, 2020 Location February 1, 2020 Derivatives designated as cash flow hedging instruments Other current assets $ 1,869 Accrued expenses $ 1,377 Derivatives not designated as hedging instruments Other current assets 100 Accrued expenses 83 Total $ 1,969 $ 1,460 The fair value of derivative instruments is valued using quoted market prices of the same or similar instruments, adjusted for counterparty risk. As a result of COVID–19, there was a significant change in the expected timing of previously hedged intercompany sales transactions, resulting in a dedesignation of the related hedge instruments. At the time of dedesignation of these hedges, they were in a net gain position of approximately $12.6 million. Due to the extenuating circumstances leading to dedesignation, gains associated with these hedges at the time of dedesignation are deferred in AOCL until being reclassified into cost of goods sold, exclusive of depreciation and amortization when the originally forecasted transactions occur and the hedged items affect earnings. During the thirteen weeks ended May 2, 2020 and subsequent to the dedesignation of these hedges, these hedge contracts were settled. Information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for the thirteen weeks ended May 2, 2020 and May 4, 2019 follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Gain recognized in AOCL (1) $ 12,235 $ 2,263 Gain reclassified from AOCL into cost of sales, exclusive of depreciation and amortization (2) $ 3,370 $ 2,541 (1) Amount represents the change in fair value of derivative contracts. (2) Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss when the hedged item affects earnings, which is when merchandise is converted to cost of sales, exclusive of depreciation and amortization. Substantially all of the unrealized gain will be recognized in costs of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) over the next twelve months . Additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for the thirteen weeks ended May 2, 2020 and May 4, 2019 follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Gain recognized in other operating loss (income), net $ 742 $ 275 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
May 02, 2020 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | r the thirteen weeks ended May 2, 2020 , the activity in accumulated other comprehensive loss was as follows: Thirteen Weeks Ended May 2, 2020 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 1, 2020 $ (109,967 ) $ 1,081 $ (108,886 ) Other comprehensive (loss) income before reclassifications (5,399 ) 12,235 6,836 Reclassified gain from accumulated other comprehensive loss (1) — (3,370 ) (3,370 ) Other comprehensive (loss) income after reclassifications (2) (5,399 ) 8,865 3,466 Ending balance at May 2, 2020 $ (115,366 ) $ 9,946 $ (105,420 ) (1) Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss. (2) No tax effect was recognized during the thirteen weeks ended May 2, 2020 due to the U.S. being a loss jurisdiction. For the thirteen weeks ended May 4, 2019 , the activity in accumulated other comprehensive loss was as follows: Thirteen Weeks Ended May 4, 2019 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 2, 2019 $ (104,887 ) $ 2,435 $ (102,452 ) Other comprehensive (loss) income before reclassifications (2,786 ) 2,263 (523 ) Reclassified gain from accumulated other comprehensive loss (1) — (2,541 ) (2,541 ) Tax effect — 225 225 Other comprehensive loss after reclassifications (2,786 ) (53 ) (2,839 ) Ending balance at May 4, 2019 $ (107,673 ) $ 2,382 $ (105,291 ) (1) Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Segment Reporting
Segment Reporting | 3 Months Ended |
May 02, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | The Company’s two operating segments are brand-based: Hollister and Abercrombie, the latter of which includes the Company’s Abercrombie & Fitch and abercrombie kids brands. These operating segments have similar economic characteristics, classes of consumers, products, and production and distribution methods, operate in the same regulatory environments, and have been aggregated into one reportable segment. Amounts shown below include net sales from wholesale, franchise and licensing operations, which are not a significant component of total revenue, and are aggregated within their respective operating segment and geographic area. The Company’s net sales by operating segment for the thirteen weeks ended May 2, 2020 and May 4, 2019 were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Hollister $ 273,012 $ 428,448 Abercrombie 212,347 305,524 Total $ 485,359 $ 733,972 Net sales by geographic area are presented by attributing revenues to an individual country on the basis of the country in which the merchandise was sold for in-store purchases and on the basis of the shipping location provided by customers for digital orders. The Company’s net sales by geographic area for the thirteen weeks ended May 2, 2020 and May 4, 2019 were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 U.S. $ 322,862 $ 469,658 EMEA 112,654 173,944 APAC 32,335 65,576 Other 17,508 24,794 International $ 162,497 $ 264,314 Total $ 485,359 $ 733,972 |
Flagship Store Exit (Benefits)
Flagship Store Exit (Benefits) Charges (Notes) | 3 Months Ended |
May 02, 2020 | |
Flagship Store Exit Charges [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | Global Store Network Optimization Reflecting a continued focus on one of the Company’s key transformation initiatives ‘Global Store Network Optimization,’ the Company continues to pivot away from its large format flagship stores and strives to open smaller, more productive omnichannel focused brand experiences. As a result, the Company has closed certain of its flagship stores and may have additional closures as it executes against this strategy. The Company recognizes impacts related to the exit of its flagship stores in flagship store exit (benefits) charges on the Consolidated Statements of Operations and Comprehensive Loss. Details of the (benefits) charges incurred during the thirteen weeks ended May 2, 2020 and May 4, 2019 related to this initiative were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Asset disposals and other store-closure costs (1) $ — $ (12 ) Employee severance and other employee transition costs (543 ) 1,756 Total flagship store exit (benefits) charges $ (543 ) $ 1,744 (1) Amounts represent costs incurred in returning the store to its original condition, including updates to previous accruals for asset retirement obligations and costs to remove inventory and store assets. Future fixed lease payments associated with closed flagship stores are reflected within short-term and long-term operating lease liabilities on the Condensed Consolidated Balance Sheets. These payments are scheduled to be paid through the fiscal year ending January 30, 2029 (“Fiscal 2028”) and are not expected to exceed $15 million in aggregate in any fiscal year. As the Company continues its ‘Global Store Network Optimization’ efforts, it may incur incremental charges or future cash expenditures not currently contemplated due to events that may occur as a result of, or that are associated with, previously announced flagship store closures and flagship store closures that have not yet been finalized. At this time, the Company is not able to quantify the amount of incremental charges or future cash expenditures that may take place in future periods resulting from any potential flagship store closures given the unpredictable nature of lease exit negotiations and ultimate lease renewal decisions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies Principles of Consolidation (Policies) | 3 Months Ended |
May 02, 2020 | |
Basis of Presentation [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of consolidation The accompanying Condensed Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its financial position, results of operations and cash flows. The Company has interests in an Emirati business venture and in a Kuwaiti business venture with Majid al Futtaim Fashion L.L.C. (“MAF”), each of which meets the definition of a variable interest entity (“VIE”). The Company is deemed to be the primary beneficiary of these VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with MAF’s portion of net income presented as net income attributable to noncontrolling interests (“NCI”) on the Condensed Consolidated Statements of Operations and Comprehensive Loss and MAF’s portion of equity presented as NCI on the Condensed Consolidated Balance Sheets. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Fiscal Years (Policies) | 3 Months Ended |
May 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Period, Policy [Policy Text Block] | Fiscal year The Company’s fiscal year ends on the Saturday closest to January 31. This typically results in a fifty-two week year, but occasionally gives rise to an additional week, resulting in a fifty-three week year. Fiscal years are designated in the Condensed Consolidated Financial Statements and notes, as well as the remainder of this Quarterly Report on Form 10-Q, by the calendar year in which the fiscal year commences. All references herein to the Company’s fiscal years are as follows: Fiscal year Year ended Number of weeks Fiscal 2019 February 1, 2020 52 Fiscal 2020 January 30, 2021 52 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Recent Accounting Pronouncements (Tables) | 3 Months Ended |
May 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Recent accounting pronouncements The Company reviews recent accounting pronouncements on a quarterly basis and has excluded discussion of those not applicable to the Company and those that did not have, or are not expected to have, a material impact on the Company’s consolidated financial statements. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Condensed Consolidated Statements of Cash Flows reconciliation (Tables) | 3 Months Ended |
May 02, 2020 | |
Condensed Statements of Cash Flows reconciliation [Abstract] | |
Reconciliation of Cash and Equivalents to Restricted cash and Equivalents [Table Text Block] | Condensed Consolidated Statements of Cash Flows reconciliation The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Condensed Consolidated Statements of Cash Flows: (in thousands) Location May 2, 2020 February 1, 2020 May 4, 2019 February 2, 2019 Cash and equivalents Cash and equivalents $ 703,989 $ 671,267 $ 586,133 $ 723,135 Long-term restricted cash and equivalents Other assets 18,286 18,696 21,548 22,694 Short-term restricted cash and equivalents Other current assets — 2,301 — — Cash and equivalents and restricted cash and equivalents $ 722,275 $ 692,264 $ 607,681 $ 745,829 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
May 02, 2020 | |
Revenue Recognition [Abstract] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | The following table details certain contract liabilities representing unearned revenue as of May 2, 2020 , February 1, 2020 , May 4, 2019 and February 2, 2019: (in thousands) May 2, 2020 February 1, 2020 May 4, 2019 February 2, 2019 Gift card liability $ 24,671 $ 28,844 $ 22,067 $ 26,062 Loyalty program liability $ 18,814 $ 23,051 $ 19,830 $ 19,904 The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Revenue associated with gift card redemptions and gift card breakage $ 11,009 $ 15,284 Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs $ 5,709 $ 6,518 |
Net Loss Per Share (Table)
Net Loss Per Share (Table) | 3 Months Ended |
May 02, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | Additional information pertaining to net loss per share attributable to A&F is as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Shares of Common Stock issued 103,300 103,300 Weighted-average treasury shares (40,759 ) (36,760 ) Weighted-average — basic shares 62,541 66,540 Dilutive effect of share-based compensation awards — — Weighted-average — diluted shares 62,541 66,540 Anti-dilutive shares (1) 2,195 2,812 (1) Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net loss per diluted share because the impact would have been anti-dilutive. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can achieve up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion. |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
May 02, 2020 | |
Fair Value Disclosures [Abstract] | |
Company's Assets and Liabilities Measured at Fair Value | The three levels of the hierarchy and the distribution of the Company’s assets and liabilities that are measured at fair value on a recurring basis, were as follows: Assets at Fair Value as of May 2, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 265 $ 23,571 $ — $ 23,836 Rabbi Trust assets (2) 1 59,638 — 59,639 Restricted cash equivalents (3) 6,298 8,050 — 14,348 Total assets $ 6,564 $ 91,259 $ — $ 97,823 Assets and Liabilities at Fair Value as of February 1, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 225 $ 58,447 $ — $ 58,672 Derivative instruments (4) — 1,969 — 1,969 Rabbi Trust assets (2) 1 109,048 — 109,049 Restricted cash equivalents (3) 9,765 4,601 — 14,366 Total assets $ 9,991 $ 174,065 $ — $ 184,056 Liabilities: Derivative instruments (4) $ — $ 1,460 $ — $ 1,460 Total liabilities $ — $ 1,460 $ — $ 1,460 (1) Level 1 assets consist of investments in money market funds. Level 2 assets consist of time deposits. (2) Level 1 assets consist of investments in money market funds. Level 2 assets consist of trust-owned life insurance policies. (3) Level 1 assets consist of investments in U.S. treasury bills and money market funds. Level 2 assets consist of time deposits. |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block] | The carrying amount and fair value of gross borrowings under the Company’s term loan facility were as follows: (in thousands) May 2, 2020 February 1, 2020 Gross borrowings outstanding, carrying amount $ 233,250 $ 233,250 Gross borrowings outstanding, fair value $ 219,255 $ 233,979 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
May 02, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net consisted of: (in thousands) May 2, 2020 February 1, 2020 Property and equipment, at cost $ 2,751,471 $ 2,744,967 Less: Accumulated depreciation and amortization (2,096,687 ) (2,079,677 ) Property and equipment, net $ 654,784 $ 665,290 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
May 02, 2020 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The following table provides a summary of the Company’s operating lease costs for the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Single lease cost (1) $ 93,492 $ 92,274 Variable lease cost (2) 27,901 42,845 Operating lease right-of-use asset impairment (3) 35,008 — Total operating lease cost $ 156,401 $ 135,119 (1) Includes amortization and interest expense associated with operating lease right-of-use assets and liabilities. (2) Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs. (3) Refer to Note 9 , “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. |
Asset Impairment (Tables)
Asset Impairment (Tables) | 3 Months Ended |
May 02, 2020 | |
Asset Impairment [Abstract] | |
Asset Impairment Charges [Text Block] | e thirteen weeks ended May 2, 2020 and May 4, 2019 were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Operating lease right-of-use asset impairment $ 35,008 $ — Property and equipment asset impairment 7,920 1,662 Total asset impairment $ 42,928 $ 1,662 Asset impairment charges for the thirteen weeks ended May 2, 2020 were principally the result of the impact of COVID-19 on store cash flows and were related to certain of the Company’s stores across brands, geographies and store formats. The impairment charge reduced the carrying value of these stores’ assets to their estimated fair value of approximately $127.9 million, including $118.8 million related to operating lease right-of-use assets. Asset impairment charges for the thirteen weeks ended May 4, 2019 , related to certain of the Company’s mall-based stores. The impairment charge reduced the carrying value of these stores’ assets to their estimated fair value of approximately $2.8 million, all of which related to operating lease right-of-use assets. |
Rabbi Trust Assets (Tables)
Rabbi Trust Assets (Tables) | 3 Months Ended |
May 02, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of Rabbi Trust Assets [Table Text Block] | S |
(Tables)
(Tables) | 3 Months Ended |
May 02, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt [Table Text Block] | Borrowings under the Amended ABL Facility as of May 2, 2020 and February 1, 2020 were as follows: (in thousands) May 2, 2020 February 1, 2020 Short-term portion of borrowings, gross at carrying amount $ 210,000 $ — |
Schedule of Borrowings | Additional details on borrowings under the Term Loan Facility as of May 2, 2020 and February 1, 2020 are as follows: (in thousands) May 2, 2020 February 1, 2020 Long-term portion of borrowings, gross at carrying amount $ 233,250 $ 233,250 Unamortized discount (296 ) (355 ) Unamortized fees (776 ) (932 ) Long-term portion of borrowings, net 232,178 231,963 Less: short-term portion of borrowings, net — — Long-term portion of borrowings, net $ 232,178 $ 231,963 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
May 02, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] | The following table details share-based compensation expense and the related income tax benefit for the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Share-based compensation expense $ 5,162 $ 2,632 Income tax benefit associated with share-based compensation expense recognized (1) $ — $ 550 |
Share-based Payment Arrangement, Discrete Tax Benefit (Charge) [Table Text Block] | The following table details discrete income tax benefits and charges related to share-based compensation awards during the thirteen weeks ended May 2, 2020 and May 4, 2019 : Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Income tax discrete benefits realized for tax deductions related to the issuance of shares (1) $ — $ 1,239 Income tax discrete charges realized upon cancellation of stock appreciation rights (1) — (165 ) Total income tax discrete benefits related to share-based compensation awards $ — $ 1,074 |
Schedule of Restricted Stock Unit Activity | The following table summarizes activity for restricted stock units for the thirteen weeks ended May 2, 2020 : Service-based Restricted Performance-based Restricted Market-based Restricted Number of (1) Weighted- Number of Weighted- Number of Weighted- Unvested at February 1, 2020 1,676,831 $ 18.68 747,056 $ 15.11 421,784 $ 23.05 Granted 1,646,771 7.29 — — — — Adjustments for performance achievement — — 38,381 11.37 134,122 11.79 Vested (639,921 ) 18.00 (478,728 ) 9.58 (350,447 ) 11.79 Forfeited (12,881 ) 19.99 (817 ) 17.56 — — Unvested at May 2, 2020 (2) 2,670,800 $ 11.81 305,892 $ 22.39 205,459 $ 34.90 (1) Includes 79,028 unvested restricted stock units as of May 2, 2020 , subject to vesting requirements related to the achievement of certain performance metrics, such as operating income and net income, for the fiscal year immediately preceding the vesting date. Holders of these restricted stock units have the opportunity to earn back one or more installments of the award if the cumulative performance requirements are met in a subsequent year. (2) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Certain unvested shares related to restricted stock units with performance-based vesting conditions can be achieved at up to 200% of their target vesting amount. |
Schedule of Stock Appreciation Rights Activity | The following table summarizes stock appreciation rights activity for the thirteen weeks ended May 2, 2020 : Number of Underlying Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Life (years) Outstanding at February 1, 2020 796,725 $ 40.06 Granted — — Exercised — — Forfeited or expired (162,475 ) 44.86 Outstanding at May 2, 2020 634,250 $ 38.84 $ — 2.6 Stock appreciation rights exercisable at May 2, 2020 634,250 $ 38.84 $ — 2.6 Stock appreciation rights expected to become exercisable in the future as of May 2, 2020 — $ — $ — 0.0 No stock appreciation rights were exercised during the thirteen weeks ended May 2, 2020 . Additional information pertaining to stock appreciation rights for the thirteen weeks ended May 4, 2019 follows: (in thousands) May 4, 2019 Total grant date fair value of awards exercised $ 2,379 |
Market-based restricted stock units [Member] | |
Schedule of Weighted-Average Estimated Fair Value and Assumptions of Restricted Stock Units with Market Vesting Conditions | Additional information pertaining to restricted stock units for the thirteen weeks ended May 2, 2020 and May 4, 2019 follows: (in thousands) May 2, 2020 May 4, 2019 Service-based restricted stock units: Total grant date fair value of awards granted $ 12,005 $ 14,473 Total grant date fair value of awards vested $ 11,519 $ 10,971 Performance-based restricted stock units: Total grant date fair value of awards granted $ — $ 5,312 Total grant date fair value of awards vested $ 4,586 $ — Market-based restricted stock units: Total grant date fair value of awards granted $ — $ 4,176 Total grant date fair value of awards vested $ 4,132 $ 511 No market-based restricted stock units were granted during the thirteen weeks ended May 2, 2020 . The weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during the thirteen weeks ended May 4, 2019 were as follows: May 4, 2019 Grant date market price $ 25.34 Fair value $ 36.24 Assumptions: Price volatility 57 % Expected term (years) 2.9 Risk-free interest rate 2.2 % Dividend yield 3.2 % Average volatility of peer companies 40.0 % Average correlation coefficient of peer companies 0.2407 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
May 02, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Location and Amounts of Derivative Fair Values on the Condensed Consolidated Balance Sheets | The location and amounts of derivative fair values of foreign currency exchange forward contracts on the Condensed Consolidated Balance Sheet as of February 1, 2020 were as follows: (in thousands) Location February 1, 2020 Location February 1, 2020 Derivatives designated as cash flow hedging instruments Other current assets $ 1,869 Accrued expenses $ 1,377 Derivatives not designated as hedging instruments Other current assets 100 Accrued expenses 83 Total $ 1,969 $ 1,460 |
Location and Amounts of Derivative Gains and Losses on the Condensed Consolidated Statements of Operations and Comprehensive Loss | Information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for the thirteen weeks ended May 2, 2020 and May 4, 2019 follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Gain recognized in AOCL (1) $ 12,235 $ 2,263 Gain reclassified from AOCL into cost of sales, exclusive of depreciation and amortization (2) $ 3,370 $ 2,541 (1) Amount represents the change in fair value of derivative contracts. (2) Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss when the hedged item affects earnings, which is when merchandise is converted to cost of sales, exclusive of depreciation and amortization. Substantially all of the unrealized gain will be recognized in costs of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) over the next twelve months . Additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for the thirteen weeks ended May 2, 2020 and May 4, 2019 follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Gain recognized in other operating loss (income), net $ 742 $ 275 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
May 02, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | For the thirteen weeks ended May 2, 2020 , the activity in accumulated other comprehensive loss was as follows: Thirteen Weeks Ended May 2, 2020 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 1, 2020 $ (109,967 ) $ 1,081 $ (108,886 ) Other comprehensive (loss) income before reclassifications (5,399 ) 12,235 6,836 Reclassified gain from accumulated other comprehensive loss (1) — (3,370 ) (3,370 ) Other comprehensive (loss) income after reclassifications (2) (5,399 ) 8,865 3,466 Ending balance at May 2, 2020 $ (115,366 ) $ 9,946 $ (105,420 ) (1) Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss. (2) No tax effect was recognized during the thirteen weeks ended May 2, 2020 due to the U.S. being a loss jurisdiction. For the thirteen weeks ended May 4, 2019 , the activity in accumulated other comprehensive loss was as follows: Thirteen Weeks Ended May 4, 2019 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 2, 2019 $ (104,887 ) $ 2,435 $ (102,452 ) Other comprehensive (loss) income before reclassifications (2,786 ) 2,263 (523 ) Reclassified gain from accumulated other comprehensive loss (1) — (2,541 ) (2,541 ) Tax effect — 225 225 Other comprehensive loss after reclassifications (2,786 ) (53 ) (2,839 ) Ending balance at May 4, 2019 $ (107,673 ) $ 2,382 $ (105,291 ) (1) Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
May 02, 2020 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Operating Segment [Table Text Block] | for the thirteen weeks ended May 2, 2020 and May 4, 2019 were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Hollister $ 273,012 $ 428,448 Abercrombie 212,347 305,524 Total $ 485,359 $ 733,972 |
Revenue from External Customers by Geographic Areas [Table Text Block] | Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 U.S. $ 322,862 $ 469,658 EMEA 112,654 173,944 APAC 32,335 65,576 Other 17,508 24,794 International $ 162,497 $ 264,314 Total $ 485,359 $ 733,972 |
Flagship Store Exit (Benefits_2
Flagship Store Exit (Benefits) Charges (Tables) | 3 Months Ended |
May 02, 2020 | |
Restructuring Cost and Reserve [Line Items] | |
Flagship Store Exit Charges [Table Text Block] | etails of the (benefits) charges incurred during the thirteen weeks ended May 2, 2020 and May 4, 2019 related to this initiative were as follows: Thirteen Weeks Ended (in thousands) May 2, 2020 May 4, 2019 Asset disposals and other store-closure costs (1) $ — $ (12 ) Employee severance and other employee transition costs (543 ) 1,756 Total flagship store exit (benefits) charges $ (543 ) $ 1,744 (1) Amounts represent costs incurred in returning the store to its original condition, including updates to previous accruals for asset retirement obligations and costs to remove inventory and store assets. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Condensed Consolidated Statements of Cash Flows reconciliation (Details) - USD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 | Feb. 02, 2019 |
Condensed Statements of Cash Flows reconciliation [Abstract] | ||||
Cash and equivalents | $ 703,989 | $ 671,267 | $ 586,133 | $ 723,135 |
Restricted Cash and Cash Equivalents | 18,286 | 18,696 | 21,548 | 22,694 |
Restricted Cash and Cash Equivalents, Current | 0 | 2,301 | 0 | 0 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 722,275 | $ 692,264 | $ 607,681 | $ 745,829 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Recent Accounting Pronouncements (Details) | 3 Months Ended |
May 02, 2020 | |
Recent Accounting Pronouncements [Abstract] | |
Maximum Length Of Time Inventory Sales Hedged | 12 months |
Impact of COVID-19 (Details)
Impact of COVID-19 (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | Feb. 01, 2020 | |
Impact of COVID-19 [Abstract] | |||
Liquidity | $ 763,400 | $ 913,800 | |
Inventory Write-down | 14,800 | ||
Government Payroll Subsidies in response to COVID-19 Benefit | 8,800 | ||
Government Payroll Subsidies in response to COVID-19 | 7,900 | ||
Asset Impairment Charges | 42,928 | $ 1,662 | |
Income Tax Expense Benefit Continuing Operations Discrete Items | 90,900 | ||
Proceeds from Short-term Debt | $ 210,000 | $ 0 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
May 02, 2020 | May 04, 2019 | Feb. 01, 2020 | Feb. 02, 2019 | |
Revenue Recognition [Abstract] | ||||
Revenue recognized from Gift Card Program | $ 11,009 | $ 15,284 | ||
Revenue recognized from Customer Loyalty Program Liability | 5,709 | 6,518 | ||
Gift Card Liability, Current | 24,671 | 22,067 | $ 28,844 | $ 26,062 |
Customer Loyalty Program Liability, Current | $ 18,814 | $ 19,830 | $ 23,051 | $ 19,904 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares shares in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | ||
Weighted Average Shares Outstanding And Anti Dilutive Shares [Abstract] | |||
Shares of Common Stock issued | 103,300 | 103,300 | |
Weighted-average treasury shares | (40,759) | (36,760) | |
Weighted-average — basic shares | 62,541 | 66,540 | |
Dilutive effect of share-based compensation awards | 0 | 0 | |
Weighted-average — diluted shares | 62,541 | 66,540 | |
Anti-dilutive shares (1) | [1] | 2,195 | 2,812 |
[1] | Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net loss per diluted share because the impact would have been anti-dilutive. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can achieve up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion. |
Fair Value (Assets and Liabilit
Fair Value (Assets and Liabilities at Fair Value) (Details) - USD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 | Feb. 02, 2019 | ||
Fair Value, Measurements, Recurring | |||||
Assets, Fair Value Disclosure [Abstract] | |||||
Cash equivalents (1) | $ 23,836 | [1] | $ 58,672 | ||
Derivative instruments (2) | 1,969 | ||||
Rabbi Trust assets (3) | 59,639 | 109,049 | |||
Restricted cash equivalents (4) | 14,348 | [2] | 14,366 | ||
Total assets | 97,823 | 184,056 | |||
Liabilities, Fair Value Disclosure [Abstract] | |||||
Derivative instruments (2) | [3] | 1,460 | |||
Total liabilities | 1,460 | ||||
Level 1 | Fair Value, Measurements, Recurring | |||||
Assets, Fair Value Disclosure [Abstract] | |||||
Cash equivalents (1) | 265 | [1] | 225 | ||
Derivative instruments (2) | 0 | ||||
Rabbi Trust assets (3) | 1 | 1 | |||
Restricted cash equivalents (4) | 6,298 | [2] | 9,765 | ||
Total assets | 6,564 | 9,991 | |||
Liabilities, Fair Value Disclosure [Abstract] | |||||
Derivative instruments (2) | [3] | 0 | |||
Total liabilities | 0 | ||||
Level 2 | Fair Value, Measurements, Recurring | |||||
Assets, Fair Value Disclosure [Abstract] | |||||
Cash equivalents (1) | 23,571 | [1] | 58,447 | ||
Derivative instruments (2) | 1,969 | ||||
Rabbi Trust assets (3) | 59,638 | 109,048 | |||
Restricted cash equivalents (4) | 8,050 | [2] | 4,601 | ||
Total assets | 91,259 | 174,065 | |||
Liabilities, Fair Value Disclosure [Abstract] | |||||
Derivative instruments (2) | [3] | 1,460 | |||
Total liabilities | 1,460 | ||||
Level 3 | Fair Value, Measurements, Recurring | |||||
Assets, Fair Value Disclosure [Abstract] | |||||
Cash equivalents (1) | 0 | [1] | 0 | ||
Derivative instruments (2) | 0 | ||||
Rabbi Trust assets (3) | 0 | 0 | |||
Restricted cash equivalents (4) | 0 | [2] | 0 | ||
Total assets | 0 | 0 | |||
Liabilities, Fair Value Disclosure [Abstract] | |||||
Derivative instruments (2) | [3] | 0 | |||
Total liabilities | 0 | ||||
Term Loan Facility | |||||
Liabilities, Fair Value Disclosure [Abstract] | |||||
Gross borrowings outstanding, carrying amount | 233,250 | 233,250 | $ 253,300 | ||
Gross borrowings outstanding, fair value | $ 219,255 | $ 233,979 | |||
[1] | Level 1 assets consist of investments in money market funds. Level 2 assets consist of time deposits. | ||||
[2] | Level 1 assets consist of investments in U.S. treasury bills and money market funds. Level 2 assets consist of time deposits. | ||||
[3] | . |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | Feb. 01, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Store asset impairment | $ 7,920 | $ 1,662 | |
Property and equipment, at cost | 2,751,471 | $ 2,744,967 | |
Less: Accumulated depreciation and amortization | (2,096,687) | (2,079,677) | |
Property and equipment, net | 654,784 | $ 665,290 | |
Asset Impairment Charges | 42,928 | 1,662 | |
Asset impairment, exclusive of flagship store exit charges | $ 42,928 | $ 1,662 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | ||
Leases [Abstract] | |||
Single lease cost | [1] | $ 93,492 | $ 92,274 |
Variable lease cost | [2] | 27,901 | 42,845 |
Operating lease right-of-use asset impairment | [3] | 35,008 | 0 |
Operating lease cost | $ 156,401 | $ 135,119 | |
Operating Lease, Weighted Average Remaining Lease Term | 6 years 1 month | ||
LesseeOperatingLeaseLeasesNotYetCommencedLiability | $ 2,600 | ||
Operating Lease, Weighted Average Discount Rate, Percent | 5.40% | ||
[1] | Includes amortization and interest expense associated with operating lease right-of-use assets and liabilities. | ||
[2] | Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs. | ||
[3] | Refer to Note 9 , “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. |
Rabbi Trust Assets (Details)
Rabbi Trust Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Defined Benefit Plan, Plan Assets, Category [Line Items] | ||
Withdrawal from Rabbi Trust Assets | $ 50,000 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended |
May 02, 2020USD ($) | |
Valuation Allowance [Line Items] | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (34,300) |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 56,600 |
Income Tax Expense Benefit Continuing Operations Discrete Items | 90,900 |
United States | |
Valuation Allowance [Line Items] | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | (10,500) |
GERMANY | |
Valuation Allowance [Line Items] | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | (6,000) |
SWITZERLAND | |
Valuation Allowance [Line Items] | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (78,900) |
Income Taxes Income Taxes (Tax
Income Taxes Income Taxes (Tax Cuts and Jobs Act of 2017) (Details) $ in Millions | 3 Months Ended |
May 02, 2020USD ($) | |
Valuation Allowance [Line Items] | |
Income Tax Expense Benefit Continuing Operations Discrete Items | $ 90.9 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 02, 2020 | Feb. 01, 2020 | Feb. 02, 2019 | |
Long-Term Borrowings [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 89,400 | ||
Long-term Debt, Excluding Current Maturities | 232,178 | $ 231,963 | |
Long-term Debt, Current Maturities | 0 | 0 | |
Short-term portion of borrowings | 210,000 | 0 | |
Schedule of Future Payments of the Term Loan Facility | |||
ABL Facility, covenant terms, minimum remaining borrowing capacity | 59,400 | ||
Letters of Credit Outstanding, Amount | 800 | ||
Term Loan Facility | |||
Long-Term Borrowings [Line Items] | |||
Maximum borrowing capacity | $ 300,000 | ||
Interest rate on borrowings | 4.50% | ||
Gross borrowings outstanding, carrying amount | $ 233,250 | 233,250 | $ 253,300 |
Unamortized discount | (296) | (355) | |
Unamortized Debt Issuance Expense Fees Paid to Lenders | (776) | (932) | |
Long-term Debt, Excluding Current Maturities | 231,963 | ||
Borrowings, net | $ 231,963 | ||
ABL Facility | |||
Long-Term Borrowings [Line Items] | |||
Maximum borrowing capacity | $ 400,000 | ||
Maturity date | Oct. 19, 2022 | ||
Interest rate on borrowings | 1.82% |
Borrowings Schedule of Short-te
Borrowings Schedule of Short-term borrowings (Details) - USD ($) $ in Thousands | May 02, 2020 | Feb. 01, 2020 |
Short-term debt disclosure [Abstract] | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 89,400 | |
Short-term portion of borrowings | $ 210,000 | $ 0 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | $ (5,323) | $ (6,288) |
Share-based compensation expense | 5,162 | 2,632 |
Tax benefit recognized related to share-based compensation expense | 0 | 550 |
Share-based Payment Arrangement, Exercise of Option, Tax Benefit | 0 | 1,239 |
Share-based Payment Arrangement, Cancellation of Option, Tax Charge | 0 | (165) |
Share-based Payment Arrangement, Discrete Income Tax Benefit (Charge) | 0 | 1,074 |
Stock Appreciation Rights | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total grant date fair value of awards vested | 2,379 | |
Service-based restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation cost, net of estimated forfeitures | $ 28,275 | |
Unrecognized compensation cost, weighted-average period of recognition | 1 year 4 months 24 days | |
Total grant date fair value of awards granted | $ 12,005 | 14,473 |
Total grant date fair value of awards vested | 11,519 | 10,971 |
Performance-based restricted stock units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation cost, net of estimated forfeitures | $ 161 | |
Unrecognized compensation cost, weighted-average period of recognition | 1 month 6 days | |
Total grant date fair value of awards granted | $ 0 | 5,312 |
Total grant date fair value of awards vested | 4,586 | 0 |
Market-based restricted stock units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation cost, net of estimated forfeitures | $ 3,308 | |
Unrecognized compensation cost, weighted-average period of recognition | 10 months 24 days | |
Total grant date fair value of awards granted | $ 0 | 4,176 |
Total grant date fair value of awards vested | 4,132 | 511 |
Additional Paid-in Capital [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | $ (20,241) | (12,037) |
Share-based compensation expense | $ 2,632 |
Share-Based Compensation (Restr
Share-Based Compensation (Restricted Stock Units Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Exercise of Option, Tax Benefit | $ 0 | $ 1,239 | |
Restricted Stock Unit Activity, Number of Underlying Shares | |||
Number of Underlying Shares, Beginning Balance at February 1, 2020 | 796,725 | ||
Number of Underlying Shares, Granted | 0 | ||
Number of Underlying Shares, Forfeited | (162,475) | ||
Number of Underlying Shares, Ending Balance at May 2, 2020 | 634,250 | ||
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant Date Fair Value, Beginning Balance at February 1, 2020 | $ 40.06 | ||
Weighted-Average Grant Date Fair Value, Granted | 0 | ||
Weighted-Average Grant Date Fair Value, Forfeited | 44.86 | ||
Weighted-Average Grant Date Fair Value, Ending Balance at May 2, 2020 | $ 38.84 | ||
Service-based restricted stock units with $1.00 net income requirement [Member] | |||
Restricted Stock Unit Activity, Number of Underlying Shares | |||
Number of Underlying Shares, Ending Balance at May 2, 2020 | 79,028 | ||
Service-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 28,275 | ||
Restricted Stock Unit Activity, Number of Underlying Shares | |||
Number of Underlying Shares, Beginning Balance at February 1, 2020 | 1,676,831 | ||
Number of Underlying Shares, Granted | 1,646,771 | ||
Number of Underlying Shares, Adjustments for performance achievement | 0 | ||
Number of Underlying Shares, Vested | (639,921) | ||
Number of Underlying Shares, Forfeited | (12,881) | ||
Number of Underlying Shares, Ending Balance at May 2, 2020 | [1] | 2,670,800 | |
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant Date Fair Value, Beginning Balance at February 1, 2020 | $ 18.68 | ||
Weighted-Average Grant Date Fair Value, Granted | 7.29 | ||
Weighted-Average Grant Date Fair Value, Adjustments for performance achievement | 0 | ||
Weighted-Average Grant Date Fair Value, Vested | 18 | ||
Weighted-Average Grant Date Fair Value, Forfeited | 19.99 | ||
Weighted-Average Grant Date Fair Value, Ending Balance at May 2, 2020 | $ 11.81 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 4 months 24 days | ||
Performance-based restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 161 | ||
Restricted Stock Unit Activity, Number of Underlying Shares | |||
Number of Underlying Shares, Beginning Balance at February 1, 2020 | 747,056 | ||
Number of Underlying Shares, Granted | 0 | ||
Number of Underlying Shares, Adjustments for performance achievement | 38,381 | ||
Number of Underlying Shares, Vested | (478,728) | ||
Number of Underlying Shares, Forfeited | (817) | ||
Number of Underlying Shares, Ending Balance at May 2, 2020 | 305,892 | ||
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant Date Fair Value, Beginning Balance at February 1, 2020 | $ 15.11 | ||
Weighted-Average Grant Date Fair Value, Granted | 0 | ||
Weighted-Average Grant Date Fair Value, Adjustments for performance achievement | 11.37 | ||
Weighted-Average Grant Date Fair Value, Vested | 9.58 | ||
Weighted-Average Grant Date Fair Value, Forfeited | 17.56 | ||
Weighted-Average Grant Date Fair Value, Ending Balance at May 2, 2020 | $ 22.39 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 month 6 days | ||
Market-based restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 3,308 | ||
Restricted Stock Unit Activity, Number of Underlying Shares | |||
Number of Underlying Shares, Beginning Balance at February 1, 2020 | 421,784 | ||
Number of Underlying Shares, Granted | 0 | ||
Number of Underlying Shares, Adjustments for performance achievement | 134,122 | ||
Number of Underlying Shares, Vested | (350,447) | ||
Number of Underlying Shares, Forfeited | 0 | ||
Number of Underlying Shares, Ending Balance at May 2, 2020 | 205,459 | ||
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant Date Fair Value, Beginning Balance at February 1, 2020 | $ 23.05 | ||
Weighted-Average Grant Date Fair Value, Granted | 0 | $ 36.24 | |
Weighted-Average Grant Date Fair Value, Adjustments for performance achievement | 11.79 | ||
Weighted-Average Grant Date Fair Value, Vested | 11.79 | ||
Weighted-Average Grant Date Fair Value, Forfeited | 0 | ||
Weighted-Average Grant Date Fair Value, Ending Balance at May 2, 2020 | $ 34.90 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 10 months 24 days | ||
[1] | (1) Includes 79,028 unvested restricted stock units as of May 2, 2020 , subject to vesting requirements related to the achievement of certain performance metrics, such as operating income and net income, for the fiscal year immediately preceding the vesting date. Holders of these restricted stock units have the opportunity to earn back one or more installments of the award if the cumulative performance requirements are met in a subsequent year. (2) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Certain unvested shares related to restricted stock units with performance-based vesting conditions can be achieved at up to 200% of their target vesting amount. |
Share-Based Compensation (Res_2
Share-Based Compensation (Restricted Stock Units Assumptions) (Details) - $ / shares | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Document Period End Date | May 2, 2020 | |
Fair value (in dollars per share) | $ 0 | |
Market-based restricted stock units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant date market price (in dollars per share) | $ 25.34 | |
Fair value (in dollars per share) | $ 0 | $ 36.24 |
Price volatility | 57.00% | |
Expected term (years) | 2 years 10 months 24 days | |
Risk-free interest rate | 2.20% | |
Dividend yield | 3.20% | |
Average volatility of peer companies | 40.00% | |
Average correlation coefficient of peer companies | 0.2407 |
Share-Based Compensation (Stock
Share-Based Compensation (Stock Appreciation Rights Activity) (Details) - USD ($) | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Stock Appreciation Rights Activity, Number of Underlying Shares | ||
Number of Underlying Shares, Beginning Balance at February 1, 2020 | 796,725 | |
Number of Underlying Shares, Granted | 0 | |
Number of Underlying Shares, Exercised | 0 | |
Number of Underlying Shares, Forfeited | (162,475) | |
Number of Underlying Shares, Ending Balance at May 2, 2020 | 634,250 | |
Number of Underlying shares, Stock appreciation rights exercisable | 634,250 | |
Number of Underlying Shares, Stock appreciation rights expected to become exercisable | 0 | |
Stock Appreciation Rights, Weighted-Average Exercise Price | ||
Weighted-Average Grant Date Fair Value, Beginning Balance at February 1, 2020 | $ 40.06 | |
Weighted-Average Exercise Price, Granted | 0 | |
Weighted-Average Exercise Price, Exercised | 0 | |
Weighted-Average Exercise Price, Forfeited or expired | 44.86 | |
Weighted-Average Grant Date Fair Value, Ending Balance at May 2, 2020 | 38.84 | |
Weighted-Average Exercise Price, Stock appreciation rights exercisable | 38.84 | |
Weighted-Average Exercise Price, Stock appreciation rights expected to become exercisable | $ 0 | |
Aggregate Intrinsic Value, Outstanding | $ 0 | |
Aggregate Intrinsic Value, Stock appreciation rights exercisable | 0 | |
Aggregate Intrinsic Value, Stock appreciation rights expected to become exercisable | $ 0 | |
Weighted-Average Remaining Contractual Life, Outstanding | 2 years 7 months 6 days | |
Weighted-Average Remaining Contractual Life, Stock appreciation rights exercisable | 2 years 7 months 6 days | |
Weighted Average Remaining Contractual Life, Stock appreciation rights expected to become exercisable | 0 years | |
Stock Appreciation Rights | ||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 2,379,000 |
Derivative Instruments (Derivat
Derivative Instruments (Derivative Fair Values on the Condensed Consolidated Balance Sheets) (Details) $ in Thousands | Feb. 01, 2020USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Foreign Currency Cash Flow Hedge Asset at Fair Value | $ 1,869 | |
Foreign Currency Cash Flow Hedge Liability at Fair Value | 1,377 | |
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value | 100 | |
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value | 83 | |
Fair Value, Measurements, Recurring | ||
The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets | ||
Other current assets | 1,969 | |
Accrued expenses | 1,460 | [1] |
Level 2 | Fair Value, Measurements, Recurring | ||
The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets | ||
Other current assets | 1,969 | |
Accrued expenses | $ 1,460 | [1] |
[1] | . |
Derivative Instruments (Deriv_2
Derivative Instruments (Derivative Gains (Losses) on the Condensed Consolidated Statement of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain (Loss) Recognized in AOCL on Derivative Contracts (Effective Portion) | [1] | $ 12,235 | $ 2,263 |
Amount of Gain (Loss) Reclassified from AOCL into Earnings (Effective Portion) | [2] | 3,370 | 2,541 |
Gain/(Loss) | $ 742 | $ 275 | |
[1] | mount represents the change in fair value of derivative contracts. | ||
[2] | Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss when the hedged item affects earnings, which is when merchandise is converted to cost of sales, exclusive of depreciation and amortization. |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
May 02, 2020 | May 04, 2019 | Feb. 01, 2020 | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign Currency Cash Flow Hedge Asset at Fair Value | $ 1,869 | |||
Foreign Currency Cash Flow Hedge Liability at Fair Value | 1,377 | |||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value | 100 | |||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value | 83 | |||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated AOCL into Income, Effective Portion, Net | [1] | $ 3,370 | $ 2,541 | |
Length of time inventory sales hedged (in months) | 12 months | |||
Derivative Instruments, Gain (Loss) Recognized in AOCL, Effective Portion, Net | [2] | $ 12,235 | $ 2,263 | |
Fair Value, Measurements, Recurring | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other current assets | 1,969 | |||
Accrued expenses | [3] | 1,460 | ||
Level 2 | Fair Value, Measurements, Recurring | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other current assets | 1,969 | |||
Accrued expenses | [3] | $ 1,460 | ||
[1] | Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss when the hedged item affects earnings, which is when merchandise is converted to cost of sales, exclusive of depreciation and amortization. | |||
[2] | mount represents the change in fair value of derivative contracts. | |||
[3] | . |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
May 02, 2020 | May 04, 2019 | |||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | $ (108,886) | $ (102,452) | ||
Other comprehensive (loss) income before reclassifications | 6,836 | (523) | ||
Reclassified from accumulated other comprehensive loss (1) | (3,370) | [1] | (2,541) | [2] |
Tax effect | 225 | |||
Other comprehensive loss after reclassifications | 3,466 | (2,839) | ||
Ending balance at August 3, 2019 | (105,420) | (105,291) | ||
Foreign Currency Translation Adjustment | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (109,967) | (104,887) | ||
Other comprehensive (loss) income before reclassifications | (5,399) | (2,786) | ||
Reclassified from accumulated other comprehensive loss (1) | 0 | 0 | ||
Tax effect | 0 | |||
Other comprehensive loss after reclassifications | (5,399) | (2,786) | ||
Ending balance at August 3, 2019 | (115,366) | (107,673) | ||
Unrealized Gain (Loss) on Derivative Financial Instruments | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | 1,081 | 2,435 | ||
Other comprehensive (loss) income before reclassifications | 12,235 | 2,263 | ||
Reclassified from accumulated other comprehensive loss (1) | (3,370) | (2,541) | ||
Tax effect | 225 | |||
Other comprehensive loss after reclassifications | 8,865 | (53) | ||
Ending balance at August 3, 2019 | $ 9,946 | $ 2,382 | ||
[1] | Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss. | |||
[2] | Amount represents gain reclassified from accumulated other comprehensive loss to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Segment Reporting (Segment Repo
Segment Reporting (Segment Reporting Information, by Segment) (Details) | 3 Months Ended |
May 02, 2020 | |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | 2 |
Number of reportable segments | 1 |
Segment Reporting (Net Sales by
Segment Reporting (Net Sales by Brand) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Schedule of Revenue by Brand [Line Items] | ||
Net sales | $ 485,359 | $ 733,972 |
Hollister | ||
Schedule of Revenue by Brand [Line Items] | ||
Net sales | 273,012 | 428,448 |
Abercrombie | ||
Schedule of Revenue by Brand [Line Items] | ||
Net sales | $ 212,347 | $ 305,524 |
Segment Reporting (Sales by Geo
Segment Reporting (Sales by Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Net sales | $ 485,359 | $ 733,972 |
United States | ||
Net sales | 322,862 | 469,658 |
EMEA [Member] | ||
Net sales | 112,654 | 173,944 |
Asia Pacific [Member] | ||
Net sales | 32,335 | 65,576 |
Other | ||
Net sales | 17,508 | 24,794 |
International [Member] | ||
Net sales | $ 162,497 | $ 264,314 |
Flagship Store Exit (Benefits_3
Flagship Store Exit (Benefits) Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 02, 2020 | May 04, 2019 | ||
Flagship Store Exit Charges [Abstract] | |||
Property, Plant and Equipment, Disposals | [1] | $ 0 | $ (12) |
Severance Costs | (543) | 1,756 | |
Flagship store exit charges | (543) | $ 1,744 | |
Maximum Annual Cash Payments | $ 15,000 | ||
[1] | Amounts represent costs incurred in returning the store to its original condition, including updates to previous accruals for asset retirement obligations and costs to remove inventory and store assets |