Kirkland's (KIRK) 10-Q 13 Sep 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Aug. 04, 2018	Sep. 04, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 4, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Trading Symbol	KIRK
Entity Registrant Name	KIRKLAND'S, INC
Entity Central Index Key	1,056,285
Current Fiscal Year End Date	--02-02
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		15,662,989

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Aug. 04, 2018	Feb. 03, 2018	Jul. 29, 2017
Current assets:
Cash and cash equivalents	$ 35,359	$ 80,156	$ 48,694
Inventories, net (1)	95,466	81,255	71,283	[1]
Prepaid expenses and other current assets (1)	21,053	15,988	21,565	[1]
Total current assets	151,878	177,399	141,542
Property and equipment:
Equipment	21,025	20,835	20,091
Furniture and fixtures	81,371	80,299	78,432
Leasehold improvements	124,133	119,272	112,435
Computer software and hardware	63,474	59,331	56,532
Projects in progress	12,637	7,685	6,400
Property and equipment, gross	302,640	287,422	273,890
Accumulated depreciation	(185,572)	(174,383)	(162,667)
Property and equipment, net	117,068	113,039	111,223
Deferred income taxes	1,344	2,216	1,022
Other assets	7,248	6,543	6,026
Total assets	277,538	299,197	259,813
Current liabilities:
Accounts payable	42,849	45,602	29,166
Accounts payable to related party vendor	6,747	7,523	4,618
Income taxes payable	0	4,943	0
Accrued expenses	35,345	38,872	31,030
Total current liabilities	84,941	96,940	64,814
Deferred rent	53,080	53,303	53,384
Deferred income taxes	411	0	2,172
Other liabilities	9,049	8,193	9,674
Total liabilities	147,481	158,436	130,044
Shareholders’ equity:
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at August 4, 2018, February 3, 2018, or July 29, 2017, respectively	0	0	0
Common stock, no par value; 100,000,000 shares authorized; 15,741,818; 15,977,239; and 16,011,169 shares issued and outstanding at August 4, 2018, February 3, 2018, and July 29, 2017, respectively	168,198	167,501	166,408
Accumulated deficit	(38,141)	(26,740)	(36,639)
Total shareholders’ equity	130,057	140,761	129,769
Total liabilities and shareholders’ equity	$ 277,538	$ 299,197	$ 259,813
[1]	Refer to Note 1 for information about a reclassification of supplies inventory from inventories, net, to prepaid expenses and other current assets.

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Aug. 04, 2018	Feb. 03, 2018	Jul. 29, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0	$ 0	$ 0
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0	0
Preferred stock, shares outstanding (in shares)	0	0	0
Common stock, par value (usd per share)	$ 0	$ 0	$ 0
Common stock, shares authorized (in shares)	100,000,000	100,000,000	100,000,000
Common stock, shares issued (in shares)	15,741,818	15,977,239	16,011,169
Common stock, shares outstanding (in shares)	15,741,818	15,977,239	16,011,169

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended			6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017		Aug. 04, 2018	Jul. 29, 2017
Income Statement [Abstract]
Net sales	$ 133,899	$ 131,683		$ 276,353	$ 264,524
Cost of sales (1)	86,765	80,593	[1]	172,330	160,980	[1]
Cost of sales related to merchandise purchased from related party vendor	10,336	11,004		21,913	20,610
Cost of sales	97,101	91,597		194,243	181,590
Gross profit	36,798	40,086		82,110	82,934
Operating expenses:
Compensation and benefits	26,020	25,974		53,869	52,484
Other operating expenses	17,965	18,079		35,284	35,074
Depreciation (exclusive of depreciation included in cost of sales)	1,774	1,729	[1]	3,538	3,350	[1]
Total operating expenses	45,759	45,782		92,691	90,908
Operating loss	(8,961)	(5,696)		(10,581)	(7,974)
Interest expense	66	65		131	126
Other income	(270)	(133)		(601)	(219)
Loss before income taxes	(8,757)	(5,628)		(10,111)	(7,881)
Income tax benefit	(2,042)	(1,856)		(2,514)	(2,674)
Net loss	$ (6,715)	$ (3,772)		$ (7,597)	$ (5,207)
Loss per share:
Basic (usd per share)	$ (0.43)	$ (0.24)		$ (0.48)	$ (0.33)
Diluted (usd per share)	$ (0.43)	$ (0.24)		$ (0.48)	$ (0.33)
Weighted average shares outstanding:
Basic (in shares)	15,726	15,974		15,925	15,943
Diluted (in shares)	15,726	15,974		15,925	15,943
[1]	Refer to Note 1 for information about a reclassification of supply-chain and store-related depreciation expense to cost of sales.

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - 6 months ended Aug. 04, 2018 - USD ($) $ in Thousands	Total	Common Stock	Accumulated Deficit
Balance, beginning of period at Feb. 03, 2018	$ 140,761	$ 167,501	$ (26,740)
Balance, beginning of period (in shares) at Feb. 03, 2018	15,977,239	15,977,239
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Employee stock purchases	$ 161	$ 161
Employee stock purchases, Shares		18,275
Exercise of stock options, Value	23	$ 23
Exercise of stock options, Shares		167,526
Restricted stock issued, Shares, Gross		108,900
Net share settlement of stock options and restricted stock, Shares		(137,478)
Net share settlement of stock options and restricted stock, Value	(378)	$ (378)
Stock-based compensation expense	891	$ 891
Repurchase and retirement of common stock, Value	$ (3,804)		(3,804)
Repurchase and retirement of common stock, Shares	(392,644)	(392,644)
Net loss	$ (7,597)		(7,597)
Balance, end of period at Aug. 04, 2018	$ 130,057	$ 168,198	$ (38,141)
Balance, end of period (in shares) at Aug. 04, 2018	15,741,818	15,741,818

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017
Cash flows from operating activities:
Net loss	$ (7,597)	$ (5,207)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	14,390	13,035
Amortization of deferred rent	(5,056)	(3,744)
Amortization of debt issue costs	27	27
Loss on disposal of property and equipment	177	120
Stock-based compensation expense	891	1,184
Deferred income taxes	1,283	1,869
Changes in assets and liabilities:
Inventories, net (1)	(14,211)	1,908	[1]
Prepaid expenses and other current assets (1)	(581)	(480)	[1]
Other noncurrent assets	(732)	(1,015)
Accounts payable	(3,067)	(3,402)
Accounts payable to related party vendor	(776)	(390)
Income taxes refundable	(9,427)	(11,446)
Accrued expenses and other current and noncurrent liabilities	2,162	6,149
Net cash used in operating activities	(22,517)	(1,392)
Net Cash Provided by (Used in) Investing Activities, Continuing Operations [Abstract]
Capital expenditures	(18,282)	(13,830)
Net cash used in investing activities	(18,282)	(13,830)
Cash flows from financing activities:
Cash used in net share settlement of stock options and restricted stock	(378)	(193)
Proceeds received from employee stock option exercises	23	0
Employee stock purchases	161	172
Repurchase and retirement of common stock	(3,804)	0
Net cash used in financing activities	(3,998)	(21)
Cash and cash equivalents:
Net decrease	(44,797)	(15,243)
Beginning of the period	80,156	63,937
End of the period	35,359	48,694
Supplemental schedule of non-cash activities:
Non-cash accruals for purchases of property and equipment	$ 2,741	$ 1,037
[1]	Refer to Note 1 for information about a reclassification of supplies inventory from inventories, net, to prepaid expenses and other current assets.

Basis of Presentation

Basis of Presentation	6 Months Ended
	Aug. 04, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation Kirkland’s, Inc. (the “Company”) is a specialty retailer of home décor in the United States operating 426 stores in 37 states as of August 4, 2018 , as well as an e-commerce enabled website, www.kirklands.com. The condensed consolidated financial statements of the Company include the accounts of Kirkland’s, Inc. and its wholly-owned subsidiaries, Kirkland’s Stores, Inc., Kirkland’s DC, Inc., and Kirkland’s Texas, LLC. Significant intercompany accounts and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 3, 2018 . It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than those at fiscal year-end. In addition, because of seasonality factors, the results of the Company’s operations for the 13-week and 26-week periods ended August 4, 2018 are not indicative of the results to be expected for any other interim period or for the entire fiscal year. The Company’s fiscal year ends on the Saturday closest to January 31, resulting in years of either 52 or 53 weeks. The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. Changes in estimates are recognized in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include, but are not limited to, impairment assessments on long-lived assets, asset retirement obligations, inventory reserves, self-insurance reserves, income tax liabilities, stock-based compensation, employee bonus accruals, gift card breakage and contingent liabilities. In the fourth quarter of fiscal 2017 , the Company concluded that it was appropriate to classify supplies inventory in prepaid expenses and other current assets instead of inventories, net, in the consolidated financial statements. The Company reclassified prior period amounts to reflect this change. This resulted in $2.1 million reclassified from inventories, net, to prepaid expenses and other current assets on the condensed consolidated balance sheet as of July 29, 2017 , and $0.1 million reclassified from inventories, net, to prepaid expense and other current assets in the changes in assets and liabilities section of the condensed consolidated statements of cash flows for the 26-week period ended July 29, 2017 . Also, during the fourth quarter of fiscal 2017 , the Company reclassified supply chain and store-related depreciation expense to cost of sales whereas it was previously included in depreciation in its financial statements. The Company also reclassified prior period amounts to reflect this change. This reclassification increased cost of sales by approximately $4.9 million and $9.7 million for the 13-week and 26-week periods ended July 29, 2017 , respectively, with an equal and offsetting decrease to depreciation. This reclassification had no impact on net sales, operating loss, net loss or loss per share.

Income Taxes

Income Taxes	6 Months Ended
	Aug. 04, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes An estimate of the annual effective tax rate is used at each interim period based on the facts and circumstances available at that time, while the actual effective tax rate is calculated at year-end. For the 13-week periods ended August 4, 2018 and July 29, 2017 , the Company recorded an income tax benefit of 23.3% and 33.0% of the loss before income taxes , respectively. For the 26-week periods ended August 4, 2018 and July 29, 2017 , the Company recorded an income tax benefit of 24.9% and 33.9% of the loss before income taxes , respectively. The decrease in the tax rate for the 13-week and 26-week periods ended August 4, 2018 was primarily due to the effect of the U.S. Tax Cuts and Jobs Act, which reduced the U.S. federal corporate rate from 35% to 21% effective as of January 1, 2018.

Loss Per Share

Loss Per Share	6 Months Ended
	Aug. 04, 2018
Earnings Per Share [Abstract]
Loss Per Share	Loss Per Share Basic loss per share is computed by dividing net loss by the weighted average number of shares outstanding during each period presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares outstanding plus the dilutive effect of stock equivalents outstanding during the applicable periods using the treasury stock method. Diluted loss per share reflects the potential dilution that could occur if options to purchase stock were exercised into common stock and if outstanding grants of restricted stock were vested. Stock options and restricted stock units that were not included in the computation of diluted loss per share, because to do so would have been antidilutive, were approximately 1.4 million and 1.5 million shares for each of the 13-week periods ended August 4, 2018 and July 29, 2017 , respectively, and 1.4 million and 1.5 million shares for each of the 26-week periods ended August 4, 2018 and July 29, 2017 , respectively.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Aug. 04, 2018
Fair Value of Financial Instruments [Abstract]
Fair Value of Financial Instruments, Policy	Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, accounts receivable, other current assets and accounts payable approximate fair value because of their short maturities. The Company also maintains The Executive Non-Qualified Excess Plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan is funded, and the Company invests participant deferrals into trust assets, which are invested in a variety of mutual funds that are Level 1 inputs. The plan assets and plan liabilities are adjusted to fair value on a recurring basis. Deferred Compensation Plan assets and liabilities were approximately $2.1 million , $2.2 million , and $2.1 million as of August 4, 2018 , February 3, 2018 , and July 29, 2017 , respectively, and were recorded in other assets and other liabilities in the condensed consolidated balance sheets.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Aug. 04, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company was named as a defendant in a putative class action filed in April 2017 in the United States District Court for the Western District of Pennsylvania, Gennock v. Kirkland’s, Inc. The complaint alleges that the Company, in violation of federal law, published more than the last five digits of a credit or debit card number on customers’ receipts. The Company denies the material allegations of the complaint. On January 9, 2018, the District Court denied the Company’s motion to dismiss this matter. On January 31, 2018, the Court granted the Company’s motion to stay the proceedings in its case pending the Third Circuit’s decision in Kamal v. J. Crew Group, Inc. , No. 17-2345 (3d. Cir.). The J. Crew case presents the exact same standing issues as the Company’s case, but in J. Crew the defendant was granted its motion to dismiss at the trial court level. On appeal, the Third Circuit heard oral argument in the J. Crew case on February 8, 2018, and a decision is expected this year. The Company continues to believe that the case is without merit and intends to continue to vigorously defend itself against the allegations. The matter is covered by insurance, and the Company does not believe that the case will have a material adverse effect on its consolidated financial condition, operating results or cash flows. The Company has been named as a defendant in a putative class action filed in May 2018 in the Superior Court of California, Miles v. Kirkland’s Stores, Inc. The case has been removed to Federal Court, Central District of California, and trial is not yet set. The complaint alleges, on behalf of Miles and all other hourly Kirkland’s employees in California, various wage and hour violations. Kirkland’s denies the material allegations in the complaint and believes that its employment policies are generally compliant with California law. The case is still relatively new, and neither party has conducted any material discovery at this time. The Company believes the case is without merit and intends to vigorously defend itself against the allegations. The Company is also party to other pending legal proceedings and claims that arise in the normal course of business. Although the outcome of such proceedings and claims cannot be determined with certainty, the Company’s management is of the opinion that it is unlikely that such proceedings and any claims in excess of insurance coverage will have a material effect on the Company’s consolidated financial condition, operating results or cash flows.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Aug. 04, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation The Company maintains equity incentive plans under which it may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units, or stock appreciation rights to employees, non-employee directors and consultants. Compensation expense is recognized on a straight-line basis over the vesting periods of each grant. There have been no material changes in the assumptions used to compute compensation expense during the current quarter. The table below sets forth selected stock-based compensation information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended August 4, 2018 July 29, 2017 August 4, 2018 July 29, 2017 Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations) $ 498 $ 395 $ 891 $ 1,184 Stock options granted 157,700 245,000 157,700 245,000 Restricted stock units granted 110,900 122,500 110,900 122,500

Related Party Transactions

Related Party Transactions	6 Months Ended
	Aug. 04, 2018
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company has an agreement with a related party vendor to purchase merchandise inventory. The vendor is considered a related party for financial reporting purposes because its principal owner is the spouse of one of the Company’s two Vice Presidents of Merchandising. The table below sets forth selected results related to this vendor in dollars (in thousands) and percentages for the periods indicated: 13-Week Period Ended 26-Week Period Ended August 4, 2018 July 29, 2017 August 4, 2018 July 29, 2017 Related Party Vendor: Purchases $ 13,086 $ 12,389 $ 24,522 $ 24,078 Purchases as a percent of total merchandise purchases 20.1 % 22.9 % 20.3 % 22.3 %

Stock Repurchase Program

Stock Repurchase Program	6 Months Ended
	Aug. 04, 2018
Treasury Stock Transactions [Abstract]
Treasury Stock [Text Block]	Stock Repurchase Plan On August 22, 2017, the Company announced that its Board of Directors authorized a stock repurchase plan providing for the purchase in the aggregate of up to $10 million of the Company’s outstanding common stock. Repurchases of shares will be made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases will be based on a variety of factors, including stock acquisition price, regulatory limitations and other market and economic factors. The stock repurchase plan does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase plan at any time. The table below sets forth selected stock repurchase plan information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended August 4, 2018 July 29, 2017 August 4, 2018 July 29, 2017 Shares repurchased and retired 77,096 — 392,644 — Share repurchase cost $ 832 $ — $ 3,804 $ — As of August 4, 2018 , the Company had approximately $5.6 million remaining under the plan.

New Accounting Pronouncements

New Accounting Pronouncements	6 Months Ended
	Aug. 04, 2018
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements New Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in ASU 2014-09 were effective for the Company at the beginning of its fiscal 2018 year. Companies that transitioned to this new standard could either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the updates with an adjustment to retained earnings at the date of adoption. The Company adopted this standard in the first quarter of fiscal 2018 using the modified retrospective method. The Company identified its loyalty program as the area that was most affected by the new revenue recognition guidance. Additionally, the Company’s historical accounting for gift card breakage is consistent with the new revenue recognition guidance. The Company’s gift card liability, net of estimated breakage, was $10.4 million , $11.3 million and $8.6 million as of August 4, 2018, February 3, 2018 and July 29, 2017, respectively, which is included in accrued expenses on the condensed consolidated balance sheet. During the 13-week period ended August 4, 2018 , the Company recognized $2.0 million of gift card redemptions related to amounts included in the gift card contract liability balance of $10.5 million as of May 5, 2018. During the 26-week period ended August 4, 2018 , the Company recognized $4.0 million of gift card redemptions related to amounts included in the gift card contract liability balance of $11.3 million as of February 3, 2018 . The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless (a) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not been issued. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company adopted this guidance in the first quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840) (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for all leases. Lessor accounting remains largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for all entities. A modified transition approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The FASB has issued guidance which allows companies to record the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings. Under this transition method, companies may continue to report comparative periods under ASC 840, although they must also provide the required disclosures under ASC 840 for all periods presented under ASC 840. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements and is anticipating a material impact on the Company’s consolidated financial statements because the Company is party to a significant number of lease contracts.

Senior Credit Facility

Senior Credit Facility	6 Months Ended
	Aug. 04, 2018
Debt Disclosure [Abstract]
Senior Credit Facility	Senior Credit Facility The Company is party to a Joinder and First Amendment to Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A. as administrative agent and collateral agent, and the lenders named therein (the “Lenders”). The Credit Agreement includes a senior secured revolving credit facility of $75 million , a swingline availability of $10 million , a $25 million incremental accordion feature and a maturity date of February 2021. Borrowings under the Credit Agreement bear interest at an annual rate equal to LIBOR plus a margin ranging from 125 to 175 basis points with no LIBOR floor, and the fee paid to the Lenders on the unused portion of the credit facility is 25 basis points per annum. Borrowings under the Credit Agreement are subject to certain conditions and contain customary events of default, including, without limitation, failure to make payments, a cross-default to certain other debt, breaches of covenants, breaches of representations and warranties, a change in control, certain monetary judgments and bankruptcy and ERISA events. Upon any such event of default, the principal amount of any unpaid loans and all other obligations under the Credit Agreement may be declared immediately due and payable. The maximum availability under the facility is limited by a borrowing base formula which consists of a percentage of eligible inventory and eligible credit card receivables, less reserves. The Company is subject to an Amended and Restated Security Agreement (the “Security Agreement”) with its Lenders. Pursuant to the Security Agreement, the Company pledged and granted to the administrative agent, for the benefit of itself and the secured parties specified therein, a lien on and security interest in all of the rights, title and interest in substantially all of the Company’s assets to secure the payment and performance of the obligations under the Credit Agreement. As of August 4, 2018 , the Company was in compliance with the covenants in the Credit Agreement, and there were no outstanding borrowings under the credit facility, with approximately $62.4 million available for borrowing.

New Accounting Pronouncements (

New Accounting Pronouncements (Policies)	6 Months Ended
	Aug. 04, 2018
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements Recently Adopted	New Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in ASU 2014-09 were effective for the Company at the beginning of its fiscal 2018 year. Companies that transitioned to this new standard could either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the updates with an adjustment to retained earnings at the date of adoption. The Company adopted this standard in the first quarter of fiscal 2018 using the modified retrospective method. The Company identified its loyalty program as the area that was most affected by the new revenue recognition guidance. Additionally, the Company’s historical accounting for gift card breakage is consistent with the new revenue recognition guidance. The Company’s gift card liability, net of estimated breakage, was $10.4 million , $11.3 million and $8.6 million as of August 4, 2018, February 3, 2018 and July 29, 2017, respectively, which is included in accrued expenses on the condensed consolidated balance sheet. During the 13-week period ended August 4, 2018 , the Company recognized $2.0 million of gift card redemptions related to amounts included in the gift card contract liability balance of $10.5 million as of May 5, 2018. During the 26-week period ended August 4, 2018 , the Company recognized $4.0 million of gift card redemptions related to amounts included in the gift card contract liability balance of $11.3 million as of February 3, 2018 . The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless (a) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not been issued. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company adopted this guidance in the first quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840) (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for all leases. Lessor accounting remains largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for all entities. A modified transition approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The FASB has issued guidance which allows companies to record the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings. Under this transition method, companies may continue to report comparative periods under ASC 840, although they must also provide the required disclosures under ASC 840 for all periods presented under ASC 840. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements and is anticipating a material impact on the Company’s consolidated financial statements because the Company is party to a significant number of lease contracts.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Aug. 04, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	The table below sets forth selected stock-based compensation information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended August 4, 2018 July 29, 2017 August 4, 2018 July 29, 2017 Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations) $ 498 $ 395 $ 891 $ 1,184 Stock options granted 157,700 245,000 157,700 245,000 Restricted stock units granted 110,900 122,500 110,900 122,500

Related Party Transactions (Tab

Related Party Transactions (Tables)	6 Months Ended
	Aug. 04, 2018
Related Party Transactions [Abstract]
Schedule of Selected Results to Vendor in Dollars and Percentages	The table below sets forth selected results related to this vendor in dollars (in thousands) and percentages for the periods indicated: 13-Week Period Ended 26-Week Period Ended August 4, 2018 July 29, 2017 August 4, 2018 July 29, 2017 Related Party Vendor: Purchases $ 13,086 $ 12,389 $ 24,522 $ 24,078 Purchases as a percent of total merchandise purchases 20.1 % 22.9 % 20.3 % 22.3 %

Stock Repurchase Program (Table

Stock Repurchase Program (Tables)	6 Months Ended
	Aug. 04, 2018
Equity, Class of Treasury Stock [Line Items]
Class of Treasury Stock [Table Text Block]	The table below sets forth selected stock repurchase plan information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended August 4, 2018 July 29, 2017 August 4, 2018 July 29, 2017 Shares repurchased and retired 77,096 — 392,644 — Share repurchase cost $ 832 $ — $ 3,804 $ —

Basis of Presentation (Details)

Basis of Presentation (Details) $ in Thousands	3 Months Ended			6 Months Ended
	Aug. 04, 2018USD ($)storestate	Jul. 29, 2017USD ($)		Aug. 04, 2018USD ($)storestate	Jul. 29, 2017USD ($)		Feb. 03, 2018USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of home decor and gifts store | store	426			426
Number of states | state	37			37
Prepaid expenses and other current assets (1)	$ 21,053	$ 21,565	[1]	$ 21,053	$ 21,565	[1]	$ 15,988
Cost of sales	$ 97,101	91,597		194,243	181,590
Prepaid expenses and other current assets (1)				$ (581)	(480)	[1]
Adjustments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets (1)		2,100			2,100
Cost of sales		$ 4,900			9,700
Prepaid expenses and other current assets (1)					$ (100)
[1]	Refer to Note 1 for information about a reclassification of supplies inventory from inventories, net, to prepaid expenses and other current assets.

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended		6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017	Aug. 04, 2018	Jul. 29, 2017
Income Tax Disclosure [Abstract]
Effective tax rate	23.30%	33.00%	24.90%	33.90%

Loss Per Share (Details)

Loss Per Share (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017	Aug. 04, 2018	Jul. 29, 2017
Earnings Per Share [Abstract]
Stock options and restricted stock units not included in the computation of diluted earnings per share (in shares)	1.4	1.5	1.4	1.5

Fair Value of Financial Instr24

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Aug. 04, 2018	Feb. 03, 2018	Jul. 29, 2017
Fair Value of Financial Instruments [Abstract]
Deferred Compensation Plan Assets	$ 2,100	$ 2,200	$ 2,100
Deferred Compensation Liability, Classified, Noncurrent	$ 2,100	$ 2,200	$ 2,100

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017	Aug. 04, 2018	Jul. 29, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations)	$ 498	$ 395	$ 891	$ 1,184
Stock options granted (in shares)	157,700	245,000	157,700	245,000
Restricted stock units granted (in shares)	110,900	122,500	110,900	122,500

Related Party Transactions (Det

Related Party Transactions (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 04, 2018USD ($)vice_president	Jul. 29, 2017USD ($)	Aug. 04, 2018USD ($)vice_president	Jul. 29, 2017USD ($)
Related party vendor
Related Party Transaction [Line Items]
Number of Vice Presidents of merchandising | vice_president	2		2
Merchandise purchases
Related Party Transaction [Line Items]
Purchases as a percent of total merchandise purchases	20.10%	22.90%	20.30%	22.30%
Merchandise purchases | Related party vendor
Related Party Transaction [Line Items]
Purchases | $	$ 13,086	$ 12,389	$ 24,522	$ 24,078

Stock Repurchase Program (Detai

Stock Repurchase Program (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017	Aug. 04, 2018	Jul. 29, 2017	Aug. 22, 2017
Treasury Stock Transactions [Abstract]
Stock Repurchase Program, Authorized Amount					$ 10,000
Stock Repurchased and Retired During Period, Shares	77,096	0	392,644	0
Payments for Repurchase of Common Stock	$ 832	$ 0	$ 3,804	$ 0
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 5,600		$ 5,600

New Accounting Pronouncements R

New Accounting Pronouncements Revenue Recognition ASU (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Aug. 04, 2018	Aug. 04, 2018	May 05, 2018	Feb. 03, 2018	Jul. 29, 2017
New Accounting Pronouncements [Abstract]
Gift Card Liability, Current	$ 10.4	$ 10.4	$ 10.5	$ 11.3	$ 8.6
Gift Card Liability, Revenue Recognized	$ 2	$ 4

Senior Credit Facility (Details

Senior Credit Facility (Details) - Secured credit facility - Revolving credit facility	6 Months Ended
	Aug. 04, 2018USD ($)
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity	$ 75,000,000
Swingline availability	$ 10,000,000
Percentage of fee on unused portion of the facility	0.25%
Incremental accordion feature	$ 25,000,000
Outstanding borrowings under the credit facility	0
Available borrowing capacity of line of credit facility	$ 62,400,000
Minimum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	1.25%
Maximum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	1.75%