Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 29, 2018 | Oct. 19, 2018 | |
Document Information [Abstract] | ||
Entity Registrant Name | CARTERS INC | |
Entity Central Index Key | 1,060,822 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 29, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 45,848,908 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 123,898 | $ 178,494 | $ 105,370 |
Accounts receivable, net | 293,489 | 240,561 | 285,651 |
Finished goods inventories | 692,985 | 548,722 | 609,996 |
Prepaid expenses and other current assets | 57,000 | 52,935 | 50,956 |
Total current assets | 1,167,372 | 1,020,712 | 1,051,973 |
Property, plant, and equipment, net of accumulated depreciation of $450,460, $404,173, and $387,041, respectively | 360,718 | 377,924 | 382,014 |
Tradenames, net | 365,754 | 365,551 | 365,595 |
Goodwill | 229,611 | 230,424 | 234,193 |
Customer relationships, net | 45,525 | 47,996 | 46,622 |
Other assets | 28,966 | 28,435 | 26,539 |
Total assets | 2,197,946 | 2,071,042 | 2,106,936 |
Current liabilities: | |||
Accounts payable | 185,285 | 182,114 | 193,878 |
Other current liabilities | 133,021 | 149,134 | 137,114 |
Total current liabilities | 318,306 | 331,248 | 330,992 |
Long-term debt, net | 798,020 | 617,306 | 687,074 |
Deferred income taxes | 87,888 | 84,944 | 138,161 |
Other long-term liabilities | 182,547 | 180,128 | 178,878 |
Total liabilities | 1,386,761 | 1,213,626 | 1,335,105 |
Commitments and contingencies - Note 14 | |||
Stockholders' equity: | |||
Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at September 29, 2018, December 30, 2017, and September 30, 2017 | 0 | 0 | 0 |
Common stock, voting; par value $.01 per share; 150,000,000 shares authorized; 46,041,329, 47,178,346 and 47,419,316 shares issued and outstanding at September 29, 2018, December 30, 2017 and September 30, 2017, respectively | 460 | 472 | 474 |
Accumulated other comprehensive loss | (32,318) | (29,093) | (26,496) |
Retained earnings | 843,043 | 886,037 | 797,853 |
Total stockholders' equity | 811,185 | 857,416 | 771,831 |
Total liabilities and stockholders' equity | $ 2,197,946 | $ 2,071,042 | $ 2,106,936 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | |||
Accumulated depreciation | $ 450,460 | $ 404,173 | $ 387,041 |
Preferred stock; par value (USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock; shares authorized | 100,000 | 100,000 | 100,000 |
Preferred stock; issued | 0 | 0 | 0 |
Preferred stock; outstanding | 0 | 0 | 0 |
Common stock, voting; par value (USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, voting; shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Common stock voting; shares issued | 46,041,329 | 47,178,346 | 47,419,316 |
Common stock voting; shares outstanding | 46,041,329 | 47,178,346 | 47,419,316 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 923,907 | $ 948,046 | $ 2,375,890 | $ 2,372,624 |
Cost of goods sold | 536,457 | 544,468 | 1,346,005 | 1,350,107 |
Gross profit | 387,450 | 403,578 | 1,029,885 | 1,022,517 |
Royalty income, net | 10,224 | 10,350 | 28,573 | 32,118 |
Selling, general, and administrative expenses | 294,117 | 283,480 | 837,621 | 781,420 |
Operating income | 103,557 | 130,448 | 220,837 | 273,215 |
Interest expense | 9,868 | 8,061 | 25,790 | 22,359 |
Interest income | (84) | (41) | (474) | (259) |
Other expense (income), net | (66) | (815) | 528 | (1,580) |
Income before income taxes | 93,839 | 123,243 | 194,993 | 252,695 |
Provision for income taxes | 22,069 | 40,927 | 43,487 | 85,992 |
Net income | $ 71,770 | $ 82,316 | $ 151,506 | $ 166,703 |
Basic net income per common share (USD per share) | $ 1.55 | $ 1.73 | $ 3.24 | $ 3.46 |
Diluted net income per common share (USD per share) | 1.53 | 1.71 | 3.20 | 3.42 |
Dividend declared per common share (USD per share) | $ 0.45 | $ 0.37 | $ 1.35 | $ 1.11 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 71,770 | $ 82,316 | $ 151,506 | $ 166,703 |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 3,213 | 4,157 | (3,225) | 8,244 |
Comprehensive income | $ 74,983 | $ 86,473 | $ 148,281 | $ 174,947 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Sep. 29, 2018 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Retained Earnings [Member] |
Balance at Dec. 30, 2017 | $ 857,416 | $ 472 | $ 0 | $ (29,093) | $ 886,037 |
Balance (in shares) at Dec. 30, 2017 | 47,178,346 | 47,178,346 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options | $ 8,732 | $ 2 | 8,730 | 0 | 0 |
Exercise of stock options (in shares) | 160,363 | ||||
Withholdings from vesting of restricted stock | (6,747) | $ (1) | (6,746) | 0 | 0 |
Withholdings from vesting of restricted stock (in shares) | (56,668) | ||||
Restricted stock activity | 0 | $ 1 | (1) | 0 | 0 |
Restricted stock activity (in shares) | 123,708 | ||||
Stock-based compensation expense | 12,110 | $ 0 | 12,110 | 0 | 0 |
Repurchase of common stock | (145,493) | $ (14) | (14,093) | 0 | (131,386) |
Repurchase of common stock (in shares) | (1,364,420) | ||||
Cash dividends declared and paid | (63,114) | $ 0 | 0 | 0 | (63,114) |
Comprehensive income | 148,281 | 0 | 0 | (3,225) | 151,506 |
Balance at Sep. 29, 2018 | $ 811,185 | $ 460 | $ 0 | $ (32,318) | $ 843,043 |
Balance (in shares) at Sep. 29, 2018 | 46,041,329 | 46,041,329 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 29, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 151,506 | $ 166,703 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property, plant, and equipment | 63,441 | 60,455 |
Amortization of intangible assets | 2,783 | 1,687 |
Adjustment to earn-out liability | 0 | (3,600) |
Amortization of debt issuance costs | 1,303 | 1,143 |
Stock-based compensation expense | 12,110 | 13,451 |
Unrealized foreign currency exchange gain, net | (68) | (1,154) |
Provisions for doubtful accounts receivable from customers | 15,547 | 3,723 |
Loss on disposal of property, plant, and equipment, net of recoveries | 516 | 602 |
Deferred income taxes | (3,173) | (1,059) |
Effect of changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (68,333) | (66,021) |
Finished goods inventories | (145,709) | (81,285) |
Prepaid expenses and other assets | (5,312) | (18,018) |
Accounts payable and other liabilities | (3,253) | 40,879 |
Net cash provided by operating activities | 21,358 | 117,506 |
Cash flows from investing activities: | ||
Capital expenditures | (47,844) | (51,656) |
Acquisitions of businesses, net of cash acquired | (159,365) | |
Acquisitions of businesses, net of cash acquired | 96 | |
Disposals and recoveries from property, plant, and equipment | 376 | 0 |
Net cash used in investing activities | (47,372) | (211,021) |
Cash flows from financing activities: | ||
Payment of debt issuance costs | (890) | (2,138) |
Borrowings under secured revolving credit facility | 290,000 | 200,000 |
Payments on secured revolving credit facility | (110,000) | (93,965) |
Repurchases of common stock | (145,493) | (150,974) |
Dividends paid | (63,114) | (53,443) |
Withholdings from vestings of restricted stock | (6,747) | (5,654) |
Proceeds from exercises of stock options | 8,732 | 5,140 |
Net cash used in financing activities | (27,512) | (101,034) |
Effect of exchange rate changes on cash and cash equivalents | (1,070) | 561 |
Net decrease in cash and cash equivalents | (54,596) | (193,988) |
Cash and cash equivalents, beginning of period | 178,494 | 299,358 |
Cash and cash equivalents, end of period | $ 123,898 | $ 105,370 |
THE COMPANY
THE COMPANY | 9 Months Ended |
Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | THE COMPANY Carter's, Inc. and its wholly owned subsidiaries (collectively, the "Company," "its," "us" and "our") design, source, and market branded childrenswear and related products under the Carter's , Child of Mine , Just One You , Precious Firsts , Simple Joys , OshKosh B'gosh (" OshKosh "), Skip Hop and other brands. The Company's products are sourced through contractual arrangements with manufacturers worldwide for: 1) wholesale distribution to leading department stores, national chains, and specialty retailers domestically and internationally and 2) distribution to the Company's own retail stores and eCommerce sites that market its brand name merchandise and other licensed products manufactured by other companies. As of September 29, 2018 , the Company operated 1,061 retail stores in the United States, Canada, and Mexico. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission (the "SEC"). All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, comprehensive income, statement of stockholders' equity, and cash flows of the Company for the interim periods presented. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the fiscal quarter and three fiscal quarters ended September 29, 2018 are not necessarily indicative of the results that may be expected for the current fiscal year ending December 29, 2018 . The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. The accompanying condensed consolidated balance sheet as of December 30, 2017 was derived from the Company's audited consolidated financial statements included in its most recently filed Annual Report on Form 10-K. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC and the instructions to Form 10-Q. As disclosed in Note 2, Basis of Presentation , and Note 3, Revenue Recognition , at the beginning of fiscal 2018 the Company adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers , and related amendments (“ASC 606”) using the full retrospective adoption method. The full retrospective method required the Company to apply the standard to the financial statements for the period of adoption as well as to each prior reporting period presented. Accounting Policies The accounting policies the Company follows are set forth in its most recently filed Annual Report on Form 10-K. There have been no material changes to these accounting policies, except as noted below for new accounting pronouncements adopted at the beginning of fiscal 2018. Revenue from Contracts with Customers (ASC No. 606) At the beginning of fiscal 2018, the Company adopted the provisions of ASC No. 606, Revenue from Contracts with Customers, and all related amendments (“ASC 606”) using the full retrospective adoption method. Refer to Note 3, Revenue Recognition, for additional information. The Company uses the five-step model to recognize revenue: 1) Identify the contract with the customer; 2) Identity the performance obligation(s); 3) Determine the transaction price; 4) Allocate the transaction price to each performance obligation if multiple obligations exist; and 5) Recognize the revenue as the performance obligations are satisfied Performance Obligations The Company identifies each distinct performance obligation to transfer goods (or bundle of goods). The Company recognizes revenue when (or as) it satisfies a performance obligation by transferring control of the goods to the customer. Other than inbound and outbound freight and shipping arrangements, the Company does not use third parties to satisfy its performance obligations in revenue arrangements with customers. When Performance Obligations Are Satisfied Wholesale Revenues - The Company typically transfers control upon shipment. However, in certain arrangements where the Company retains the risk of loss during shipment, satisfaction of the performance obligation occurs when the goods reach the customer. Retail Revenues - For transactions in stores, the Company satisfies its performance obligation at point of sale when the customer takes possession of the goods and tenders payment. The redemption of loyalty points under the Company's rewards program and redemptions of gift cards may be part of a transaction. For purchases made through the Company’s eCommerce channel, revenue is recognized when the goods are physically delivered to the customer. The Company satisfies its performance obligations with licensees over time as customers have the right to use the intellectual property over the contract period. Significant Payment Terms Retail customers tender a form of payment, such as cash or a credit/debit card, at point of sale. For wholesale customers and licensees, payment is due based on established terms. Returns and Refunds The Company establishes return provisions for retail customers. It is the Company's policy not to accept returns from wholesale customers. Significant Judgments Sale of Goods - The Company relies on shipping terms to determine when performance obligations are satisfied. When goods are shipped to wholesale customers “FOB Shipping Point,” control of the goods is transferred to the customer at the time of shipment if there are no remaining performance obligations. The Company recognizes the revenue once control passes to the customer. For retail transactions, no significant judgments are involved since revenue is recognized at the point of sale when tender is exchanged and the customer receives the goods. Royalty Revenues - The Company transfers the right-to-use benefit to the licensee for the contract term and therefore the Company satisfies its performance obligation over time. Revenue recognized for each reporting period is based on the greater of: 1) the royalties owed on actual net sales by the licensee and 2) a minimum royalty guarantee, if applicable. Transaction Price - The transaction price is the amount of consideration the Company expects to receive under the arrangement. The Company is required to estimate variable consideration (if any) and to factor that estimation into the determination of the transaction price. The Company may offer sales incentives to wholesale and retail customers, including discounts. For retail transactions, the Company has significant experience with return patterns and relies on this experience to estimate expected returns when determining the transaction price. Standalone Selling Prices - For arrangements that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation on a relative standalone selling price basis. Costs Incurred to Obtain a Contract - Incremental costs to obtain contracts are not material to the Company. Policy Elections In addition to those previously disclosed, the Company has made the following accounting policy elections and practical expedients: Portfolio Approach - The Company uses the portfolio approach when multiple contracts or performance obligations are involved in the determination of revenue recognition. Taxes - The Company excludes from the transaction price any taxes collected from customers that are remitted to taxing authorities. Shipping and Handling Charges - Charges that are incurred before and after the customer obtains control of goods are deemed to be fulfillment costs. Time Value of Money - The Company's payment terms are less than one year from the transfer of goods. Therefore, the Company does not adjust promised amounts of consideration for the effects of the time value of money. Disclosure of Remaining Performance Obligations - The Company does not disclose the aggregate amount of the transaction price allocated to remaining performance obligations for contracts that are one year or less in term. Classification of Costs Related to Defined Benefit Pension and Other Post-retirement Benefit Plans (ASU 2017-07) At the beginning of fiscal 2018, the Company adopted ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost ("ASU 2017-07"). ASU 2017-07 changes how employers that sponsor defined benefit pension and/or other post-retirement benefit plans present the net periodic benefit costs in the statement of operations. Under this new guidance, an employer's statement of operations presents service cost arising in the current period in the same statement line item as other employee compensation. However, all other components of current period costs related to defined benefit plans, such as prior service costs and actuarial gains and losses, are presented on the statement of operations on a line item outside (or below) operating income. ASU 2017-07 affects only the classification of certain costs on the statement of operations, not the determination of costs. Net periodic pension costs related to the Company's frozen defined benefit pension plan and post-retirement medical benefit plan were not material for the third quarter of fiscal 2018, three fiscal quarters of 2018, or prior periods. Prior period results have not been reclassified on the Company's statement of operations due to materiality. Modifications to Share-based Compensation Awards (ASU 2017-09) At the beginning of fiscal 2018, the Company adopted ASU No. 2017-09, Compensation-Stock Compensation Topic 718-Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 clarifies when changes to the terms and conditions of share-based payment awards must be accounted for as modifications. Entities apply the modification accounting guidance if the value, vesting conditions, or classification of an award changes. The Company has not modified any share-based payment awards. If the Company modifies share-based payment awards in the future, it will apply the provisions of ASU 2017-09. Definition of a Business (ASU 2017-01) At the beginning of fiscal 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 assists entities in determining if acquired assets constitute the acquisition of a business or the acquisition of assets for accounting and reporting purposes. This distinction is important because goodwill can only be recognized in an acquisition of a business. Prior to ASU 2017-01, if revenues were generated immediately before and after a transaction, the acquisition was typically considered a business. Under ASU 2017-01, entities are required to further assess the substance of the processes they acquire. If the Company commences or completes an acquisition in future periods, it will apply the provisions of ASU 2017-01. Statement of Cash Flows (ASU 2016-15) At the beginning of fiscal 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) ("ASU 2016-15"). ASU 2016-15 represents a consensus of the FASB’s Emerging Issues Task Force on eight separate issues that, if present, can impact classifications on the statement of cash flows. The guidance requires application using a retrospective transition method. The adoption of ASU 2016-15 only impacted the classification of certain insurance proceeds on the Company's consolidated statement of cash flows for the first three quarters of fiscal 2018. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company’s revenues are earned from contracts or arrangements with retail and wholesale customers and licensees. Contracts include written agreements, as well as arrangements that are implied by customary practices or law. At the beginning of fiscal 2018, the Company adopted the provisions of ASC 606 using the full retrospective adoption method. Under the full retrospective method, the Company adjusted all periods in fiscal 2017 and fiscal 2016 to reflect the provisions of ASC 606, and retained earnings at January 2, 2016 (beginning of fiscal 2016) were adjusted for the cumulative effect for prior periods. Refer to the section "Revenue from Contracts with Customers (ASC No. 606)" in Note 2, Basis of Presentation , for changes to the Company's accounting policies due to the adoption of ASC 606. ASC 606 affected the Company's retail channels as follows: • Accelerated the recognition of breakage revenue from unredeemed gift cards, which affected net sales, gross profit, income before income taxes, and net income on the Company's statements of operations. Basic and diluted net income per share were affected by $0.01 or less for each reporting period. Related gift card liabilities and income tax liabilities were also affected. • A portion of the estimated value of goods expected to be returned by customers was reclassified between net sales and cost of goods sold, with no net effect on gross profit, income before income taxes, or net income on the Company's statement of operations. Related reclassifications were also made between other current assets and other current liabilities on the Company's balance sheets. The effects of retrospective adoption on the Company's consolidated Statements of Operations were as follows: Third Quarter Three Fiscal Quarters Year Year (dollars in thousands, except per share data) Fiscal 2017 Fiscal 2017 Fiscal 2017 Fiscal 2016 Net sales $ (186 ) $ (480 ) $ 92 $ (637 ) Cost of goods sold $ 84 $ 110 $ 52 $ (7 ) Income before income taxes $ (270 ) $ (590 ) $ 40 $ (630 ) Net income $ (170 ) $ (371 ) $ 84 $ (397 ) Basic net income per common share $ — $ (0.01 ) $ — $ (0.01 ) Diluted net income per common share $ — $ (0.01 ) $ — $ — The cumulative effect to the Company’s retained earnings at January 2, 2016 was an after-tax increase of approximately $0.6 million . The effects of adoption of ASC 606 on the Company’s consolidated balance sheet at December 30, 2017 were as follows: (dollars in thousands) As Previously Reported ASC 606 Adjustments As Amended for ASC 606 ASSETS Prepaid expenses and other current assets $ 49,892 $ 3,043 (1) $ 52,935 Total current assets $ 1,017,669 $ 3,043 $ 1,020,712 Total assets $ 2,067,999 $ 3,043 $ 2,071,042 LIABILITIES AND STOCKHOLDERS' EQUITY Other current liabilities $ 146,510 $ 2,624 (2) $ 149,134 Total current liabilities $ 328,624 $ 2,624 $ 331,248 Deferred income taxes $ 84,848 $ 96 $ 84,944 Total liabilities $ 1,210,906 $ 2,720 $ 1,213,626 Retained earnings 885,714 323 (3) 886,037 Total stockholder's equity $ 857,093 $ 323 $ 857,416 Total liabilities and stockholders' equity $ 2,067,999 $ 3,043 $ 2,071,042 (1) Reclassification of estimated inventory expected to be returned by customers through future sales refund transactions. This amount was reclassified from the returns reserve (current liability) to a current asset. Prior to the Company's adoption of ASC 606, the Company's returns reserve (current liability) was reported net of the estimated inventory expected to be returned by customers through sales refund transactions. (2) Amount includes a reclassification of approximately $3.0 million for estimated inventory expected to be returned by customers, partially offset by a reclassification of approximately $0.4 million for gift card liabilities. (3) Cumulative impact of approximately $0.6 million for after-tax adjustments to retained earnings at the beginning of fiscal 2016, offset by ASC 606 effects on fiscal 2017 and fiscal 2016 results of operations. The retrospective adoption of ASC 606 at the beginning of fiscal 2018 also had the following effects on the Company’s unaudited condensed consolidated balance sheet at September 30, 2017: (dollars in thousands) As Previously Reported ASC 606 Adjustments As Amended for ASC 606 ASSETS Prepaid expenses and other current assets $ 48,083 $ 2,873 (1) $ 50,956 Total current assets $ 1,049,100 $ 2,873 $ 1,051,973 Total assets $ 2,104,063 $ 2,873 $ 2,106,936 LIABILITIES AND STOCKHOLDERS' EQUITY Other current liabilities $ 134,031 $ 3,083 (2) $ 137,114 Total current liabilities $ 327,909 $ 3,083 $ 330,992 Deferred income taxes $ 138,239 $ (78 ) 138,161 Total liabilities $ 1,332,100 $ 3,005 $ 1,335,105 Retained earnings $ 797,985 $ (132 ) (3) $ 797,853 Total stockholder's equity $ 771,963 $ (132 ) $ 771,831 Total liabilities and stockholders' equity $ 2,104,063 $ 2,873 $ 2,106,936 (1) Reclassification of estimated inventory expected to be returned by customers through future sales refund transactions. This amount was reclassified from the returns reserve (current liability) to a current asset. Prior to the Company's adoption of ASC 606, the Company's returns reserve (current liability) was reported net of the estimated inventory expected to be returned by customers through sales refund transactions. (2) Amount includes a reclassification of approximately $2.9 million for estimated inventory expected to be returned by customers and an adjustment of approximately $0.2 million for gift card liabilities. (3) Cumulative impact of approximately $0.6 million for after-tax adjustments to retained earnings at the beginning of fiscal 2016, offset by ASC 606 impact on fiscal 2017 and fiscal 2016 results of operations. Disaggregation of Revenue The Company sells its products directly to consumers ("direct-to-consumer") and to other retail companies and partners that subsequently sell the products directly to their own retail customers. The Company also earns royalties from its licensees. Disaggregated revenues from these sources for the third quarter and three quarters ended fiscal 2018 and 2017 were as follows: Fiscal quarter ended September 29, 2018 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 338,963 $ 54,373 $ 393,336 Direct-to-consumer 459,101 — 71,470 530,571 $ 459,101 $ 338,963 $ 125,843 $ 923,907 Royalty income $ 3,614 $ 5,891 $ 719 $ 10,224 Three fiscal quarters ended September 29, 2018 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 829,272 $ 117,255 $ 946,527 Direct-to-consumer 1,244,863 — 184,500 1,429,363 $ 1,244,863 $ 829,272 $ 301,755 $ 2,375,890 Royalty income $ 9,625 $ 16,693 $ 2,255 $ 28,573 Fiscal quarter ended September 30, 2017 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 369,577 $ 55,524 $ 425,101 Direct-to-consumer 453,843 — 69,102 522,945 $ 453,843 $ 369,577 $ 124,626 $ 948,046 Royalty income $ 3,038 $ 6,648 $ 664 $ 10,350 Three fiscal quarters ended September 30, 2017 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 879,842 $ 112,827 $ 992,669 Direct-to-consumer 1,209,143 — 170,812 1,379,955 $ 1,209,143 $ 879,842 $ 283,639 $ 2,372,624 Royalty income $ 11,201 $ 18,153 $ 2,764 $ 32,118 Accounts Receivable from Customers and Licensees The components of Accounts receivable, net, were as follows: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Trade receivables from wholesale customers, net $ 281,190 $ 229,968 $ 274,238 Royalties receivable 9,667 9,818 9,331 Tenant allowances and other receivables 14,165 14,511 13,863 Total gross receivables $ 305,022 $ 254,297 $ 297,432 Less: Wholesale accounts receivable reserves (11,533 ) (13,736 ) (11,781 ) Accounts receivable, net $ 293,489 $ 240,561 $ 285,651 Contract Assets and Liabilities The Company's contract assets are not material. Contract Liabilities The Company recognizes a contract liability when it has received consideration from the customer and has a future obligation to transfer goods to the customer. Total contract liabilities consisted of the following amounts: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Contract liabilities-current: Unredeemed gift cards $ 11,304 $ 11,945 $ 10,236 Unredeemed customer loyalty rewards 8,441 7,355 8,485 Total contract liabilities-current (*) $ 19,745 $ 19,300 $ 18,721 * Included with Other current liabilities on the Company's consolidated balance sheet. Composition of Contract Liabilities Unredeemed gift cards - the Company is obligated to transfer goods in the future to customers who have purchased gift cards. Periodic changes in the gift card contract liability result from the redemption of gift cards by customers and the recognition of estimated breakage revenue for those gift card balances that are not expected to be redeemed. The majority of our gift cards do not have an expiration date; however, all outstanding gift card balances are classified by the Company as current liabilities since gift cards are redeemable on demand by the valid holder. The majority of the Company's gift cards are redeemed within one year of issuance. Unredeemed loyalty rewards - points and reward certificates earned by customers under the Company’s loyalty programs represent obligations of the Company to transfer goods to the customer upon redemption. Periodic changes in the loyalty program contract liability result from reward certificate redemptions and expirations. The earning and redemption cycles for our loyalty program are under one year in duration. |
BUSINESS ACQUISITIONS IN FISCAL
BUSINESS ACQUISITIONS IN FISCAL 2017 | 9 Months Ended |
Sep. 29, 2018 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS IN FISCAL 2017 | BUSINESS ACQUISITIONS IN FISCAL 2017 Based on their purchase prices and pre-acquisition operating results and assets, neither of the businesses acquired by the Company in fiscal 2017 met the materiality requirements for preparation and presentation of pro forma financial information, either individually or in the aggregate. Skip Hop Acquisition Carter's, Inc.'s wholly-owned subsidiary, The William Carter Company ("TWCC"), acquired 100% of the voting equity interests of Skip Hop Holdings, Inc. and subsidiaries (collectively "Skip Hop") after the close of business on February 22, 2017. The Skip Hop purchase was deemed to be the acquisition of a business under the provisions of ASC No. 805, Business Combinations ("ASC 805"). The Company's consolidated financial statements reflect the consolidation of the financial position, results of operations and cash flows of Skip Hop beginning February 23, 2017. In the Company's unaudited condensed consolidated balance sheet at July 1, 2017, the preliminary purchase price of approximately $147.3 million , net of $0.8 million cash acquired, was comprised of the following acquired assets and assumed liabilities: $54.2 million of goodwill including an assembled workforce; $92.7 million of intangible assets comprised of a tradename and acquired customer relationships; $54.9 million of tangible assets acquired; and $20.2 million of liabilities in addition to $35.9 million of deferred income tax liabilities. The measurement period (as defined in ASC 805) for Skip Hop was complete at the end of fiscal 2017 and all measurement period adjustments were reflected in the Company's consolidated balance sheet as of December 30, 2017. As a result of the measurement period adjustments recorded between the acquisition date and the end of fiscal 2017, the net assets acquired consisted of the following: $46.0 million of goodwill including an assembled workforce; $104.1 million of intangible assets comprised of a tradename and acquired customer relationships; $53.9 million of tangible assets acquired; and $20.8 million of liabilities in addition to $36.3 million of deferred income tax liabilities. The adjusted purchase price was approximately $142.5 million , net of $0.8 million of cash acquired. Acquisition of Mexican Licensee On August 1, 2017, the Company, through certain of its wholly-owned subsidiaries, acquired the outstanding equity of the Company's licensee in Mexico and a related entity (collectively "Carter's Mexico"). Both entities are incorporated under Mexican law. Prior to the acquisition, Carter's Mexico was primarily a licensee and wholesale customer of the Company. The Carter's Mexico purchase was deemed to be the acquisition of a business under the provisions of ASC 805. The Company's consolidated financial statements reflect the consolidation of the financial position, results of operations and cash flows of Carter's Mexico beginning August 1, 2017. Carter's Mexico became part of the Company's International reportable segment. As of December 30, 2017, preliminary values assigned to assets acquired included inventories of approximately $8.3 million , a customer relationships intangible asset of approximately $3.5 million , and goodwill of approximately $6.2 million . Measurement period adjustments made in the first quarter of fiscal 2018 were not material. The measurement period (as defined in ASC 805) for the acquisition of Carter's Mexico was completed during the second quarter of fiscal 2018 and all measurement period adjustments were reflected in the Company's consolidated balance sheet as of September 29, 2018. As a result of the measurement period adjustments recorded between the acquisition date and the end of the second quarter of fiscal 2018, the values assigned to assets acquired included inventories of approximately $8.0 million , a customer relationships intangible asset of approximately $3.5 million , and goodwill of approximately $6.3 million . |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 29, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive loss consisted of the following: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Cumulative foreign currency translation adjustments $ (24,510 ) $ (21,285 ) $ (19,380 ) Pension and post-retirement obligations (*) (7,808 ) (7,808 ) (7,116 ) Total accumulated other comprehensive loss $ (32,318 ) $ (29,093 ) $ (26,496 ) (*) Net of income taxes of $4.4 million , $4.4 million , and $4.2 million , respectively. The deferred income taxes associated with these obligations are subject to adjustments upon the Company's adoption of ASC 2018-02. See Note 16, Pending Adoption of Recent Accounting Pronouncements . During the first three quarters of both fiscal 2018 and fiscal 2017 , no amounts were reclassified from accumulated other comprehensive loss to the statement of operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The Company's goodwill and intangible assets were as follows: September 29, 2018 December 30, 2017 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ 136,570 $ 136,570 $ 136,570 Canada goodwill Indefinite 41,074 41,074 42,223 42,223 Skip Hop goodwill Indefinite 45,976 45,976 45,997 45,997 Carter's Mexico goodwill Indefinite 5,991 5,991 5,634 5,634 Total goodwill $ 229,611 $ 229,611 $ 230,424 $ 230,424 Carter's tradename Indefinite $ 220,233 $ 220,233 $ 220,233 $ 220,233 OshKosh tradename Indefinite 85,500 85,500 85,500 85,500 Skip Hop tradename Indefinite 56,800 56,800 56,800 56,800 Finite-life tradenames 5-20 years 3,911 $ 690 3,221 3,550 $ 532 3,018 Total tradenames, net $ 366,444 $ 690 $ 365,754 $ 366,083 $ 532 $ 365,551 Skip Hop customer relationships 15 years $ 47,300 $ 4,686 $ 42,614 $ 47,300 $ 2,304 $ 44,996 Carter's Mexico customer relationships 10 years 3,289 378 2,911 3,135 135 3,000 Total customer relationships, net $ 50,589 $ 5,064 $ 45,525 $ 50,435 $ 2,439 $ 47,996 September 30, 2017 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ 136,570 Canada goodwill Indefinite 42,514 42,514 Skip Hop goodwill Indefinite 49,190 49,190 Carter's Mexico goodwill Indefinite 5,919 5,919 Total goodwill $ 234,193 $ 234,193 Carter's tradename Indefinite $ 220,233 $ 220,233 OshKosh tradename Indefinite 85,500 85,500 Skip Hop tradename Indefinite 56,800 56,800 Finite-life tradenames 5-20 years 42,040 $ 38,978 3,062 Total tradenames, net $ 404,573 $ 38,978 $ 365,595 Skip Hop customer relationships, net 15 years $ 44,800 $ 1,554 $ 43,246 Carter's Mexico customer relationships 10 years 3,376 — 3,376 Total customer relationships, net $ 48,176 $ 1,554 $ 46,622 Amortization expense for intangible assets subject to amortization was approximately $0.9 million and $0.8 million for the third fiscal quarter ended September 29, 2018 and third fiscal quarter ended September 30, 2017 , respectively. For the first three quarters of fiscal 2018 and fiscal 2017 , amortization expense was approximately $2.8 million and $1.7 million , respectively. The estimated amortization expense for the next five fiscal years is as follows: (dollars in thousands) Amortization 2019 $ 3,751 2020 $ 3,751 2021 $ 3,751 2022 $ 3,751 2023 $ 3,708 |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 29, 2018 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK | COMMON STOCK Open Market Share Repurchases The total aggregate remaining capacity under outstanding repurchase authorizations as of September 29, 2018 was approximately $440.1 million , based on settled repurchase transactions. The authorizations have no expiration date. The Company repurchased and retired shares in open market transactions in the following amounts for the fiscal periods indicated: Fiscal quarter ended Three fiscal quarters ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Number of shares repurchased 543,793 596,178 1,364,420 1,727,587 Aggregate cost of shares repurchased (dollars in thousands) $ 56,401 $ 52,742 $ 145,493 $ 150,974 Average price per share $ 103.72 $ 88.47 $ 106.63 $ 87.39 Future repurchases may occur from time to time in the open market, in privately negotiated transactions, or otherwise. The timing and amount of any repurchases will be determined by the Company's management, based on its evaluation of market conditions, share price, other investment priorities, and other factors. Dividends In the third fiscal quarter and three fiscal quarters ended September 29, 2018 , the Company declared and paid cash dividends per share of $0.45 and $1.35 , respectively. In the third fiscal quarter and three fiscal quarters ended September 30, 2017 , the Company declared and paid cash dividends per share of $0.37 and $1.11 , respectively. Future declarations of dividends and the establishment of future record and payment dates are at the discretion of the Company's Board of Directors and are based on a number of factors, including the Company's future financial performance and other investment priorities. Provisions in the indenture governing the senior notes of TWCC and in TWCC's secured revolving credit facility could have the effect of restricting the Company's ability to pay future cash dividends on, or make future repurchases of, its common stock. Provisions related to the indenture governing the senior notes are described in the Company's Annual Report on Form 10-K for the 2017 fiscal year ended December 30, 2017. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 29, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Senior notes at amounts repayable $ 400,000 $ 400,000 $ 400,000 Less unamortized issuance-related costs for senior notes (2,980 ) (3,694 ) (3,926 ) Senior notes, net 397,020 396,306 396,074 Secured revolving credit facility 401,000 221,000 291,000 Total long-term debt, net $ 798,020 $ 617,306 $ 687,074 Secured Revolving Credit Facility On September 21, 2018, TWCC and a syndicate of lenders entered into Amendment No. 1 to its fourth amended and restated credit agreement that, among other things, extended the term of the facility from August 25, 2022 to September 21, 2023. As amended, the secured revolving credit facility provides: (i) a maturity date for the maturity of September 21, 2023 and (ii) an aggregate credit line of $750 million which includes a $650 million U.S. dollar facility and a $100 million multicurrency facility denominated in U.S. dollars, Canadian dollars, Euros, Pounds Sterling, or other currencies agreed to by the applicable lenders. The $650 million U.S. dollar facility is inclusive of a $100 million sub-limit for letters of credit and a swing line sub-limit of $70 million . The $100 million multicurrency facility is inclusive of a $40 million sub-limit for letters of credit and a swing line sub-limit of $15 million . In addition, the secured revolving credit facility includes additional potential borrowing facilities up to $425 million , which is comprised of a $350 million U.S. dollar revolving credit facility and a $75 million multicurrency revolving credit facility. The U.S. dollar revolving credit facility can also potentially increase to an unlimited borrowing amount so long as the consolidated first lien leverage ratio (as defined in the secured revolving credit facility) does not exceed 2.25 :1.00. Under the secured revolving credit facility, TWCC and its domestic subsidiaries have granted to the collateral agent, for the benefit of the lenders, valid and perfected first priority security interests in substantially all of their present and future assets, excluding certain customary exceptions, and guarantee the obligations of the borrowers. In addition, The Genuine Canadian Corp., as Canadian borrower, and Carter’s Holdings B.V., as Dutch borrower, have each guaranteed the obligations of the other. As of September 29, 2018 , the Company had $401.0 million in outstanding borrowings under its secured revolving credit facility, exclusive of $4.5 million of outstanding letters of credit. As of September 29, 2018 , approximately $344.5 million remained available for future borrowing. All outstanding borrowings under the Company's secured revolving credit facility are classified as non-current liabilities on the Company's consolidated balance sheet because of the contractual repayment terms under the credit facility. As of September 29, 2018 , the interest rate applicable to the secured revolving credit facility were 1.375% for LIBOR (London Interbank Offered Rate) rate loans (which may be adjusted based on a leverage-based pricing grid ranging from 1.125% to 1.875% ) and 0.375% for base rate loans (which may be adjusted based on a leverage-based pricing grid ranging from 0.125% to 0.875% ). As of September 29, 2018 , U.S. dollar borrowings outstanding under the secured revolving credit facility accrued interest at a LIBOR rate plus the applicable base rate , which resulted in a weighted-average borrowing rate of 3.58% . All outstanding Canadian dollar borrowings were repaid during the first quarter of fiscal 2017. As of September 29, 2018 , the Company was in compliance with the financial and other covenants under the secured revolving credit facility. Senior Notes As of September 29, 2018 , TWCC had outstanding $400 million principal amount of senior notes bearing interest at a fixed rate of 5.25% per annum and maturing on August 15, 2021. The senior notes are unsecured and are fully and unconditionally guaranteed by Carter's, Inc. and certain subsidiaries of TWCC. On the Company's consolidated balance sheet, the senior notes are reported net of certain unamortized issuance-related costs, as shown in the table above. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company recorded stock-based compensation expense as follows: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Stock options $ 1,148 $ 983 $ 3,604 $ 3,182 Restricted stock: Time-based awards 1,881 1,706 5,989 5,668 Performance-based awards (1,185 ) 1,116 1,314 3,419 Stock awards — — 1,203 1,182 Total $ 1,844 $ 3,805 $ 12,110 $ 13,451 The Company recognizes compensation cost ratably over the applicable performance periods based on the estimated probability of achievement of its performance targets at the end of each period. During the third fiscal quarter of 2018, the achievement of performance target estimates related to certain performance-based grants were revised resulting in a $2.5 million reduction to stock compensation expense. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As of September 29, 2018 , the Company had gross unrecognized income tax benefits of approximately $15.3 million , of which $12.9 million , if ultimately recognized, may affect the Company's effective income tax rate in the periods settled. The Company has recorded tax positions for which the ultimate deductibility is more likely than not, but for which there is uncertainty about the timing of such deductions. Included in the reserves for unrecognized tax benefits at September 29, 2018 were approximately $2.0 million of reserves for which the statute of limitations is expected to expire within the next fiscal year. If these tax benefits are ultimately recognized, such recognition, net of federal income taxes, may affect the annual effective income tax rate for fiscal 2018 or fiscal 2019 along with the effective income tax rate in the quarter in which the benefits are recognized. The Company recognizes interest related to unrecognized tax benefits as a component of interest expense and recognizes penalties related to unrecognized income tax benefits as a component of income tax expense. During the fiscal quarter ended September 29, 2018 , interest expense recorded on uncertain tax positions was approximately $0.6 million , while the interest expense recorded for the fiscal quarter ended September 30, 2017 was not material. The Company had approximately $1.9 million , $1.0 million , and $1.1 million of interest accrued on uncertain tax positions as of September 29, 2018 , December 30, 2017 , and September 30, 2017 , respectively. For the full fiscal year 2018 , the Company estimates that its consolidated effective income tax rate will be approximately 22.0% . U.S. Tax Reform The provision for income taxes recognized by the Company during the fiscal fourth quarter of 2017 reflected certain provisional estimates for the accounting of the December 22, 2017 enactment of income tax law changes commonly known as the U.S. Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act"). The provisional accounting for the 2017 Tax Act is permitted by SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, issued in late December 2017. Subsequent adjustments, if any, to the provisional accounting estimates must be reflected in income tax provisions/benefits during one or more periods in fiscal 2018. During the fourth quarter of fiscal 2017, the Company recorded a provisional tax expense estimate for the one-time transition tax liability for all of its foreign subsidiaries, resulting in an increase in income tax expense of approximately $10.4 million related to foreign earnings. The one-time transition tax is based on the Company's total post-1986 earnings and profits ("E&P") that the Company previously deferred from United States income taxes. During the third quarter of fiscal 2018, the Company completed its calculation of the one-time transition tax for all of its foreign subsidiaries. The adjustments made to this provisional tax expense estimate during the first three quarters of fiscal 2018 were not material. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable, but the related cumulative temporary difference as of December 30, 2017 and September 29, 2018 would not result in a material incremental deferred tax liability. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table summarizes assets and liabilities that are remeasured at fair value each reporting period: September 29, 2018 December 30, 2017 September 30, 2017 (dollars in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Investments (1) $ 17.6 — — $ 16.7 — — $ 15.7 — — Liabilities Foreign exchange forward contracts (2) — — — — — — — $ 0.2 — (1) Included in Other assets on the Company's consolidated balance sheet. (2) Included in Other current liabilities on the Company's consolidated balance sheet. Investments The Company invests in marketable securities, principally equity-based mutual funds, to mitigate the risk associated with the investment return on employee deferrals of compensation. Gains on the investments in marketable securities were $0.7 million and $0.9 million for the third fiscal quarter and the three fiscal quarters ended September 29, 2018 , respectively, and were $0.4 million and $1.6 million for the third fiscal quarter and three fiscal quarters ended September 30, 2017 , respectively. These amounts are included in Other expense (income), net on the Company's consolidated statement of operations. Contingent Consideration The estimated fair value of contingent consideration related to the Skip Hop acquisition was based on a weighted payout probability at the measurement date. Facts and circumstances that occurred subsequent to the acquisition indicated that the contingent earn out arrangement would not be achieved, and therefore approximately $3.6 million was credited to the Company's earnings during the third fiscal quarter ended September 30, 2017. Borrowings As of September 29, 2018 , the fair value of the Company's $401.0 million in outstanding borrowings under its secured revolving credit facility approximated the carrying value. The fair value of the Company's senior notes at September 29, 2018 was approximately $406 million . The fair value of these senior notes with a notional value and carrying value (gross of debt cost) of $400 million was estimated using a quoted price as provided in the secondary market, which considers the Company's credit risk and market related conditions, and is therefore within Level 2 of the fair value hierarchy. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 29, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following is a reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding: Fiscal quarter ended Three fiscal quarters ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 45,990,039 47,303,074 46,399,746 47,829,794 Dilutive effect of equity awards 490,283 541,325 538,422 549,213 Diluted number of common and common equivalent shares outstanding 46,480,322 47,844,399 46,938,168 48,379,007 Basic net income per common share (in thousands, except per share data): Net income $ 71,770 $ 82,316 $ 151,506 $ 166,703 Income allocated to participating securities (540 ) (651 ) (1,142 ) (1,311 ) Net income available to common shareholders $ 71,230 $ 81,665 $ 150,364 $ 165,392 Basic net income per common share $ 1.55 $ 1.73 $ 3.24 $ 3.46 Diluted net income per common share (in thousands, except per share data): Net income $ 71,770 $ 82,316 $ 151,506 $ 166,703 Income allocated to participating securities (536 ) (645 ) (1,134 ) (1,301 ) Net income available to common shareholders $ 71,234 $ 81,671 $ 150,372 $ 165,402 Diluted net income per common share $ 1.53 $ 1.71 $ 3.20 $ 3.42 Anti-dilutive awards excluded from diluted earnings per share computation 326,129 662,130 266,646 618,826 |
OTHER CURRENT AND LONG-TERM LIA
OTHER CURRENT AND LONG-TERM LIABILITIES | 9 Months Ended |
Sep. 29, 2018 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT AND LONG-TERM LIABILITIES | OTHER CURRENT AND LONG-TERM LIABILITIES Other current liabilities that exceeded five percent of total current liabilities, at the end of any comparable period, were as follows: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Accrued bonuses and incentive compensation $ 6,286 $ 27,566 $ 9,328 Income taxes payable 21,124 16,252 28,393 Accrued employee benefits 13,987 21,735 12,503 Accrued and deferred rent 19,137 18,213 18,160 Other long-term liabilities that exceeded five percent of total liabilities, at the end of any comparable period, were as follows: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Deferred lease incentives $ 75,331 $ 75,104 $ 76,599 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company is subject to various claims and pending or threatened lawsuits in the normal course of business. The Company is not currently a party to any legal proceedings that it believes would have a material adverse impact on its financial position, results of operations, or cash flows. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 29, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The table below presents certain information for our reportable segments and unallocated corporate expenses for the periods indicated. Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) September 29, % of September 30, % of September 29, % of September 30, % of Net sales : U.S. Retail $ 459,101 49.7 % $ 453,843 47.9 % $ 1,244,863 52.4 % $ 1,209,143 50.9 % U.S. Wholesale 338,963 36.7 % 369,577 39.0 % 829,272 34.9 % 879,842 37.1 % International 125,843 13.6 % 124,626 13.1 % 301,755 12.7 % 283,639 12.0 % Total net sales $ 923,907 100.0 % $ 948,046 100.0 % $ 2,375,890 100.0 % $ 2,372,624 100.0 % Operating income (loss) : % of Segment Net Sales % of Segment Net Sales % of % of U.S. Retail (1)(5) $ 47,139 10.3 % $ 55,519 12.2 % $ 122,086 9.8 % $ 127,441 10.5 % U.S. Wholesale (2)(5) 67,785 20.0 % 78,572 21.3 % 148,395 17.9 % 184,073 20.9 % International (5)(6) 12,434 9.9 % 16,726 13.4 % 20,508 6.8 % 28,008 9.9 % Corporate expenses (3)(4) (23,801 ) (20,369 ) (70,152 ) (66,307 ) Total operating income $ 103,557 11.2 % $ 130,448 13.8 % $ 220,837 9.3 % $ 273,215 11.5 % (1) Includes insurance recoveries of approximately $0.4 million associated with storm-related store closures in 2017 for the three fiscal quarters ended September 29, 2018 . (2) Includes approximately $12.8 million of charges related to a customer bankruptcy for the three fiscal quarters ended September 29, 2018 . (3) Corporate expenses include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, office occupancy, information technology, certain legal fees, consulting fees, and audit fees. (4) Includes the following charges: Fiscal quarter ended Three fiscal quarters ended (dollars in millions) September 29, September 30, September 29, September 30, Acquisition contingency fair value adjustment $ — $ (3.6 ) $ — $ (3.6 ) Direct sourcing initiative $ — $ 0.1 $ — $ 0.3 Acquisition-related costs $ — $ 0.8 $ — $ 3.3 (5) Includes $0.4 million and $0.8 million of certain costs related to inventory acquired from Skip Hop in operating income between U.S. Wholesale, U.S. Retail, and International for the fiscal quarter and three fiscal quarters ended September 30, 2017 , respectively. (6) Fiscal quarter and three fiscal quarters ended September 29, 2018 include approximately $3.5 million in costs associated with changes to the Company's business model in China, which includes inventory and severance charges. |
PENDING ADOPTION OF RECENT ACCO
PENDING ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 29, 2018 | |
Accounting Policies [Abstract] | |
PENDING ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | PENDING ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS Leases (ASU 2016-02) In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases-Topic 842, which has been codified in ASC 842, Leases ("ASC 842"). Under this new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases): 1) a lease liability equal to the lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and 2) a right-of-use asset which will represent the lessee's right to use, or control the use of, a specified asset for the lease term. The new standard will be effective for the Company at the beginning of fiscal 2019, including interim periods within the year of adoption. The Company is assessing the implications of applying the practical expedients and accounting policy elections, implementing software to meet the reporting requirements of the new standard, and identifying changes to its business processes and controls to support the adoption of the new standard. The Company believes the adoption will have a material impact on the total assets and total liabilities reported on the Company's consolidated balance sheets, but is not able to quantify the effect on the consolidated balance sheets at this time. However, the Company does not believe adoption of this standard will have a material impact on the Company's consolidated results of operations or cash flows. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"). ASU 2018-02 permits a company to reclassify the income tax effects of the U.S. Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act") on items within accumulated other comprehensive income or loss ("AOCI-L") to retained earnings. Because most items that are charged to AOCI-L are recorded net of applicable income taxes, the subsequent reclassification of these items from AOCI-L to the statement of operations will be at different income tax rates due to the 2017 Tax Act, thereby leaving a "stranded" tax balance within AOCI-L. ASU 2018-02 will allow a company to transfer these "stranded" amounts from AOCI-L to retained earnings. ASU 2018-02 will be effective for the Company at the beginning of fiscal 2019, with early adoption permitted. The Company has amounts in its AOCI-L for defined benefit retirement plans that were recorded net of applicable income taxes, thus the Company anticipates the transfer of "stranded" tax amounts from its AOCI-L to retained earnings upon the adoption of ASU 2018-02. The effect of the adoption of ASU 2018-02 will not be material to the Company's financial position, and the adoption will have no impact on the Company's results of operations or cash flows. Credit Losses (ASU 2016-13) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") . This new guidance will change how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 will replace the current "incurred loss" model with an "expected loss" model. Under the "incurred loss" model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that causes the entity to believe that a loss is probable (i.e., that it has been "incurred"). Under the "expected loss" model, an entity will recognize a loss (or allowance) upon initial recognition of the asset that reflects all future events that will lead to a loss being realized, regardless of whether it is probable that the future event will occur. The "incurred loss" model considers past events and current conditions, while the "expected loss" model includes expectations for the future which have yet to occur. ASU 2016-13 will be effective for the Company at the beginning of fiscal 2020 with early adoption permitted for fiscal 2019, including interim periods therein. The standard will require entities to record a cumulative-effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the potential impact that ASU 2016-13 may have on the timing of recognizing future provisions for expected losses on the Company's accounts receivable. Goodwill Impairment Testing (ASU 2017-04) In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04") . ASU 2017-04 will eliminate the requirement to calculate the implied fair value of goodwill (step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value (i.e., measure the charge based on the current step 1). Any impairment charge will be limited to the amount of goodwill allocated to an affected reporting unit. ASU 2017-04 will not change the current guidance for completing Step 1 of the goodwill impairment test, and an entity will still be able to perform the current optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. Upon adoption, ASU 2017-04 will be applied prospectively. Adoption for the Company will be effective for annual and interim impairment tests performed beginning in fiscal 2020. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The impact that ASU 2017-04 may have on the Company's financial condition or results of operations will depend on the circumstances of any goodwill impairment event that may occur after adoption. |
GUARANTOR UNAUDITED CONDENSED C
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 29, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The Company’s senior notes constitute debt obligations of its wholly-owned subsidiary, The William Carter Company ("TWCC" or the "Subsidiary Issuer"), are unsecured and are fully and unconditionally guaranteed by Carter’s, Inc. (the "Parent"), by certain of the Parent's current domestic subsidiaries (other than TWCC), and, subject to certain exceptions, future restricted subsidiaries that guarantee the Company’s secured revolving credit facility or certain other debt of the Company or the subsidiary guarantors. For additional information, refer to the Company's Annual Report on Form 10-K for the 2017 fiscal year ended December 30, 2017. The condensed consolidating financial information for the Parent, the Subsidiary Issuer, and the guarantor and non-guarantor subsidiaries has been prepared from the books and records maintained by the Company. The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10. The financial information may not necessarily be indicative of the financial position, results of operations, comprehensive income (loss), and cash flows, had the Parent, Subsidiary Issuer, guarantor or non-guarantor subsidiaries operated as independent entities. Intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. The Company has accounted for investments in subsidiaries under the equity method. The guarantor subsidiaries are 100% owned directly or indirectly by the Parent and all guarantees are joint, several, and unconditional. Condensed Consolidating Balance Sheets (unaudited) As of September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 70,518 $ 19,755 $ 33,625 $ — $ 123,898 Accounts receivable, net — 235,167 38,986 19,336 — 293,489 Intercompany receivable — 131,518 123,104 47,869 (302,491 ) — Finished goods inventories — 385,969 261,141 78,694 (32,819 ) 692,985 Prepaid expenses and other current assets — 21,690 23,431 11,879 — 57,000 Total current assets — 844,862 466,417 191,403 (335,310 ) 1,167,372 Property, plant, and equipment, net — 137,709 185,203 37,806 — 360,718 Goodwill — 136,570 45,368 47,673 — 229,611 Tradenames, net — 223,117 142,637 — — 365,754 Customer relationships, net — — 42,614 2,911 — 45,525 Other assets — 25,422 1,690 1,854 — 28,966 Intercompany long-term receivable — — 490,514 — (490,514 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 811,185 1,117,864 283,169 — (2,212,218 ) — Total assets $ 811,185 $ 2,585,544 $ 1,657,612 $ 281,647 $ (3,138,042 ) $ 2,197,946 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 121,721 $ 45,351 $ 18,213 $ — $ 185,285 Intercompany payables — 164,290 132,713 5,488 (302,491 ) — Other current liabilities — 40,703 75,358 16,960 — 133,021 Total current liabilities — 326,714 253,422 40,661 (302,491 ) 318,306 Long-term debt — 798,020 — — — 798,020 Deferred income taxes — 45,480 41,820 588 — 87,888 Intercompany long-term liability — 490,514 — — (490,514 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 80,812 88,860 12,875 — 182,547 Stockholders' equity 811,185 844,004 1,173,510 227,523 (2,245,037 ) 811,185 Total liabilities and stockholders' equity $ 811,185 $ 2,585,544 $ 1,657,612 $ 281,647 $ (3,138,042 ) $ 2,197,946 As of December 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 129,463 $ 10,030 $ 39,001 $ — $ 178,494 Accounts receivable, net — 182,944 40,286 17,331 — 240,561 Intercompany receivable — 87,702 162,007 58,980 (308,689 ) — Finished goods inventories — 296,065 206,556 66,569 (20,468 ) 548,722 Prepaid expenses and other current assets — 17,012 21,354 14,569 — 52,935 Total current assets — 713,186 440,233 196,450 (329,157 ) 1,020,712 Property, plant, and equipment, net — 147,858 189,511 40,555 — 377,924 Goodwill — 136,570 45,368 48,486 — 230,424 Tradenames, net — 223,251 142,300 — — 365,551 Customer relationships, net — — 44,996 3,000 — 47,996 Other assets — 23,884 2,392 2,159 — 28,435 Intercompany long-term receivable — — 441,294 — (441,294 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 857,416 1,053,224 231,994 — (2,142,634 ) — Total assets $ 857,416 $ 2,397,973 $ 1,538,088 $ 290,650 $ (3,013,085 ) $ 2,071,042 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 115,658 $ 49,313 $ 17,143 $ — $ 182,114 Intercompany payables — 215,573 91,697 1,419 (308,689 ) — Other current liabilities — 11,805 122,989 14,340 — 149,134 Total current liabilities — 343,036 263,999 32,902 (308,689 ) 331,248 Long-term debt — 617,306 — — — 617,306 Deferred income taxes — 46,619 37,647 678 — 84,944 Intercompany long-term liability — 441,294 — — (441,294 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 71,834 92,570 15,724 — 180,128 Stockholders' equity 857,416 877,884 1,043,872 241,346 (2,163,102 ) 857,416 Total liabilities and stockholders' equity $ 857,416 $ 2,397,973 $ 1,538,088 $ 290,650 $ (3,013,085 ) $ 2,071,042 As of September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 56,715 $ 17,771 $ 30,884 $ — $ 105,370 Accounts receivable, net — 229,425 37,165 19,061 — 285,651 Intercompany receivable — 113,950 114,420 35,964 (264,334 ) — Finished goods inventories — 311,260 245,934 74,631 (21,829 ) 609,996 Prepaid expenses and other current assets — 18,339 22,342 10,275 — 50,956 Total current assets — 729,689 437,632 170,815 (286,163 ) 1,051,973 Property, plant, and equipment, net — 149,889 192,065 40,060 — 382,014 Goodwill — 136,570 48,566 49,057 — 234,193 Tradenames, net — 223,295 142,300 — — 365,595 Customer relationships, net — — 43,246 3,376 — 46,622 Other assets — 23,274 1,533 1,732 — 26,539 Intercompany long-term receivable — — 411,787 — (411,787 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 771,831 983,575 204,093 — (1,959,499 ) — Total assets $ 771,831 $ 2,346,292 $ 1,481,222 $ 265,040 $ (2,757,449 ) $ 2,106,936 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 120,892 $ 54,334 $ 18,652 $ — $ 193,878 Intercompany payables — 148,416 111,972 3,946 (264,334 ) — Other current liabilities — 45,656 78,381 13,077 — 137,114 Total current liabilities — 314,964 244,687 35,675 (264,334 ) 330,992 Long-term debt — 687,074 — — — 687,074 Deferred income taxes — 70,290 66,972 899 — 138,161 Intercompany long-term liability — 411,787 — — (411,787 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 68,517 95,329 15,032 — 178,878 Stockholders' equity 771,831 793,660 974,234 213,434 (1,981,328 ) 771,831 Total liabilities and stockholders' equity $ 771,831 $ 2,346,292 $ 1,481,222 $ 265,040 $ (2,757,449 ) $ 2,106,936 Condensed Consolidating Statements of Operations (unaudited) For the fiscal quarter ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 570,007 $ 506,994 $ 119,182 $ (272,276 ) $ 923,907 Cost of goods sold — 424,895 309,123 60,701 (258,262 ) 536,457 Gross profit — 145,112 197,871 58,481 (14,014 ) 387,450 Royalty income, net — 8,515 5,320 — (3,611 ) 10,224 Selling, general, and administrative expenses — 53,008 214,036 34,888 (7,815 ) 294,117 Operating income (loss) — 100,619 (10,845 ) 23,593 (9,810 ) 103,557 Interest expense — 9,866 1,329 — (1,327 ) 9,868 Interest income — (1,329 ) (2 ) (80 ) 1,327 (84 ) (Income) loss in subsidiaries (71,770 ) (6,446 ) (21,608 ) — 99,824 — Other (income) expense, net — — 235 (301 ) — (66 ) Income (loss) before income taxes 71,770 98,528 9,201 23,974 (109,634 ) 93,839 Provision for income taxes — 16,948 2,755 2,366 — 22,069 Net income (loss) $ 71,770 $ 81,580 $ 6,446 $ 21,608 $ (109,634 ) $ 71,770 For the fiscal quarter ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 587,022 $ 506,272 $ 106,105 $ (251,353 ) $ 948,046 Cost of goods sold — 423,433 297,858 59,500 (236,323 ) 544,468 Gross profit — 163,589 208,414 46,605 (15,030 ) 403,578 Royalty income, net — 8,245 5,501 — (3,396 ) 10,350 Selling, general, and administrative expenses — 49,368 210,175 32,704 (8,767 ) 283,480 Operating income — 122,466 3,740 13,901 (9,659 ) 130,448 Interest expense — 8,013 1,375 — (1,327 ) 8,061 Interest income — (1,330 ) — (38 ) 1,327 (41 ) (Income) loss in subsidiaries (82,316 ) (4,555 ) (11,037 ) — 97,908 — Other (income) expense, net — (120 ) 123 (818 ) — (815 ) Income (loss) before income taxes 82,316 120,458 13,279 14,757 (107,567 ) 123,243 Provision for income taxes — 28,483 8,724 3,720 — 40,927 Net income (loss) $ 82,316 $ 91,975 $ 4,555 $ 11,037 $ (107,567 ) $ 82,316 For the three fiscal quarters ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,376,806 $ 1,379,293 $ 298,148 $ (678,357 ) $ 2,375,890 Cost of goods sold — 1,028,751 820,721 147,498 (650,965 ) 1,346,005 Gross profit — 348,055 558,572 150,650 (27,392 ) 1,029,885 Royalty income, net — 24,043 13,739 — (9,209 ) 28,573 Selling, general, and administrative expenses — 137,246 626,125 98,500 (24,250 ) 837,621 Operating income (loss) — 234,852 (53,814 ) 52,150 (12,351 ) 220,837 Interest expense — 25,778 3,983 10 (3,981 ) 25,790 Interest income — (3,999 ) (2 ) (454 ) 3,981 (474 ) (Income) loss in subsidiaries (151,506 ) 14,593 (45,032 ) — 181,945 — Other expense, net — 19 360 149 — 528 Income (loss) before income taxes 151,506 198,461 (13,123 ) 52,445 (194,296 ) 194,993 Provision for income taxes — 34,604 1,470 7,413 — 43,487 Net income (loss) $ 151,506 $ 163,857 $ (14,593 ) $ 45,032 $ (194,296 ) $ 151,506 For the three fiscal quarters ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,393,351 $ 1,337,078 $ 239,022 $ (596,827 ) $ 2,372,624 Cost of goods sold — 1,014,968 783,973 133,948 (582,782 ) 1,350,107 Gross profit — 378,383 553,105 105,074 (14,045 ) 1,022,517 Royalty income, net — 25,580 14,508 — (7,970 ) 32,118 Selling, general, and administrative expenses — 128,595 593,544 85,267 (25,986 ) 781,420 Operating income (loss) — 275,368 (25,931 ) 19,807 3,971 273,215 Interest expense — 22,124 4,121 95 (3,981 ) 22,359 Interest income — (4,169 ) — (71 ) 3,981 (259 ) (Income) loss in subsidiaries (166,703 ) 23,699 (15,395 ) — 158,399 — Other (income) expense, net — (745 ) 771 (1,606 ) — (1,580 ) Income (loss) before income taxes 166,703 234,459 (15,428 ) 21,389 (154,428 ) 252,695 Provision for income taxes — 71,727 8,271 5,994 — 85,992 Net income (loss) $ 166,703 $ 162,732 $ (23,699 ) $ 15,395 $ (154,428 ) $ 166,703 Condensed Consolidating Statements of Comprehensive Income (unaudited) For the fiscal quarter ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 71,770 $ 81,580 $ 6,446 $ 21,608 $ (109,634 ) $ 71,770 Foreign currency translation adjustments 3,213 3,213 3,213 3,213 (9,639 ) 3,213 Comprehensive income (loss) $ 74,983 $ 84,793 $ 9,659 $ 24,821 $ (119,273 ) $ 74,983 For the fiscal quarter ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 82,316 $ 91,975 $ 4,555 $ 11,037 $ (107,567 ) $ 82,316 Foreign currency translation adjustments 4,157 4,157 4,157 4,157 (12,471 ) 4,157 Comprehensive income (loss) $ 86,473 $ 96,132 $ 8,712 $ 15,194 $ (120,038 ) $ 86,473 For the three fiscal quarters ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 151,506 $ 163,857 $ (14,593 ) $ 45,032 $ (194,296 ) $ 151,506 Foreign currency translation adjustments (3,225 ) (3,225 ) (3,225 ) (3,225 ) 9,675 (3,225 ) Comprehensive income (loss) $ 148,281 $ 160,632 $ (17,818 ) $ 41,807 $ (184,621 ) $ 148,281 For the three fiscal quarters ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 166,703 $ 162,732 $ (23,699 ) $ 15,395 $ (154,428 ) $ 166,703 Foreign currency translation adjustments 8,244 8,244 8,244 8,244 (24,732 ) 8,244 Comprehensive income (loss) $ 174,947 $ 170,976 $ (15,455 ) $ 23,639 $ (179,160 ) $ 174,947 Condensed Consolidating Statements of Cash Flows (unaudited) For the three fiscal quarters ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows (used in) provided by operating activities: $ — $ (11,296 ) $ (16,349 ) $ 49,003 $ — $ 21,358 Cash flows from investing activities: Capital expenditures — (13,121 ) (30,056 ) (4,667 ) — (47,844 ) Intercompany investing activity 206,622 (2,116 ) 3,024 1,077 (208,607 ) — Acquisitions of businesses, net of cash acquired — — — 96 — 96 Disposals and recoveries from property, plant, and equipment — — 369 7 — 376 Net cash provided by (used in) investing activities 206,622 (15,237 ) (26,663 ) (3,487 ) (208,607 ) (47,372 ) Cash flows from financing activities: Intercompany financing activity — (211,522 ) (12,263 ) 15,178 208,607 — Payment of debt issuance costs — (890 ) — — — (890 ) Borrowings under secured revolving credit facility — 290,000 — — — 290,000 Payments on secured revolving credit facility — (110,000 ) — — — (110,000 ) Dividends paid (63,114 ) — 65,000 (65,000 ) — (63,114 ) Repurchases of common stock (145,493 ) — — — — (145,493 ) Withholdings from vestings of restricted stock (6,747 ) — — — — (6,747 ) Proceeds from exercises of stock options 8,732 — — — — 8,732 Net cash (used in) provided by financing activities (206,622 ) (32,412 ) 52,737 (49,822 ) 208,607 (27,512 ) Effect of exchange rate changes on cash — — — (1,070 ) — (1,070 ) Net (decrease) increase in cash and cash equivalents — (58,945 ) 9,725 (5,376 ) — (54,596 ) Cash and cash equivalents, beginning of period — 129,463 10,030 39,001 — 178,494 Cash and cash equivalents, end of period $ — $ 70,518 $ 19,755 $ 33,625 $ — $ 123,898 For the three fiscal quarters ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows provided by operating activities: $ — $ 53,299 $ 54,934 $ 9,273 $ — $ 117,506 Cash flows from investing activities: Capital expenditures — (16,678 ) (28,867 ) (6,111 ) — (51,656 ) Intercompany investing activity 204,931 (510 ) — — (204,421 ) — Acquisition of business, net of cash acquired — (144,520 ) 746 (15,591 ) — (159,365 ) Net cash provided by (used in) investing activities 204,931 (161,708 ) (28,121 ) (21,702 ) (204,421 ) (211,021 ) Cash flows from financing activities: Intercompany financing activity — (186,794 ) (20,859 ) 3,232 204,421 — Payment of debt issuance costs — (2,138 ) — — — (2,138 ) Borrowings under secured revolving credit facility — 200,000 — — — 200,000 Payments on secured revolving credit facility — (75,000 ) — (18,965 ) — (93,965 ) Dividends paid (53,443 ) — — — — (53,443 ) Repurchases of common stock (150,974 ) — — — — (150,974 ) Withholdings from vestings of restricted stock (5,654 ) — — — — (5,654 ) Proceeds from exercises of stock options 5,140 — — — — 5,140 Net cash (used in) provided by financing activities (204,931 ) (63,932 ) (20,859 ) (15,733 ) 204,421 (101,034 ) Effect of exchange rate changes on cash — — — 561 — 561 Net (decrease) increase in cash and cash equivalents — (172,341 ) 5,954 (27,601 ) — (193,988 ) Cash and cash equivalents, beginning of period — 229,056 11,817 58,485 — 299,358 Cash and cash equivalents, end of period $ — $ 56,715 $ 17,771 $ 30,884 $ — $ 105,370 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue from Contracts with Customers (ASC No. 606) | Revenue from Contracts with Customers (ASC No. 606) At the beginning of fiscal 2018, the Company adopted the provisions of ASC No. 606, Revenue from Contracts with Customers, and all related amendments (“ASC 606”) using the full retrospective adoption method. Refer to Note 3, Revenue Recognition, for additional information. The Company uses the five-step model to recognize revenue: 1) Identify the contract with the customer; 2) Identity the performance obligation(s); 3) Determine the transaction price; 4) Allocate the transaction price to each performance obligation if multiple obligations exist; and 5) Recognize the revenue as the performance obligations are satisfied Performance Obligations The Company identifies each distinct performance obligation to transfer goods (or bundle of goods). The Company recognizes revenue when (or as) it satisfies a performance obligation by transferring control of the goods to the customer. Other than inbound and outbound freight and shipping arrangements, the Company does not use third parties to satisfy its performance obligations in revenue arrangements with customers. When Performance Obligations Are Satisfied Wholesale Revenues - The Company typically transfers control upon shipment. However, in certain arrangements where the Company retains the risk of loss during shipment, satisfaction of the performance obligation occurs when the goods reach the customer. Retail Revenues - For transactions in stores, the Company satisfies its performance obligation at point of sale when the customer takes possession of the goods and tenders payment. The redemption of loyalty points under the Company's rewards program and redemptions of gift cards may be part of a transaction. For purchases made through the Company’s eCommerce channel, revenue is recognized when the goods are physically delivered to the customer. The Company satisfies its performance obligations with licensees over time as customers have the right to use the intellectual property over the contract period. Significant Payment Terms Retail customers tender a form of payment, such as cash or a credit/debit card, at point of sale. For wholesale customers and licensees, payment is due based on established terms. Returns and Refunds The Company establishes return provisions for retail customers. It is the Company's policy not to accept returns from wholesale customers. Significant Judgments Sale of Goods - The Company relies on shipping terms to determine when performance obligations are satisfied. When goods are shipped to wholesale customers “FOB Shipping Point,” control of the goods is transferred to the customer at the time of shipment if there are no remaining performance obligations. The Company recognizes the revenue once control passes to the customer. For retail transactions, no significant judgments are involved since revenue is recognized at the point of sale when tender is exchanged and the customer receives the goods. Royalty Revenues - The Company transfers the right-to-use benefit to the licensee for the contract term and therefore the Company satisfies its performance obligation over time. Revenue recognized for each reporting period is based on the greater of: 1) the royalties owed on actual net sales by the licensee and 2) a minimum royalty guarantee, if applicable. Transaction Price - The transaction price is the amount of consideration the Company expects to receive under the arrangement. The Company is required to estimate variable consideration (if any) and to factor that estimation into the determination of the transaction price. The Company may offer sales incentives to wholesale and retail customers, including discounts. For retail transactions, the Company has significant experience with return patterns and relies on this experience to estimate expected returns when determining the transaction price. Standalone Selling Prices - For arrangements that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation on a relative standalone selling price basis. Costs Incurred to Obtain a Contract - Incremental costs to obtain contracts are not material to the Company. Policy Elections In addition to those previously disclosed, the Company has made the following accounting policy elections and practical expedients: Portfolio Approach - The Company uses the portfolio approach when multiple contracts or performance obligations are involved in the determination of revenue recognition. Taxes - The Company excludes from the transaction price any taxes collected from customers that are remitted to taxing authorities. Shipping and Handling Charges - Charges that are incurred before and after the customer obtains control of goods are deemed to be fulfillment costs. Time Value of Money - The Company's payment terms are less than one year from the transfer of goods. Therefore, the Company does not adjust promised amounts of consideration for the effects of the time value of money. Disclosure of Remaining Performance Obligations - The Company does not disclose the aggregate amount of the transaction price allocated to remaining performance obligations for contracts that are one year or less in term. |
Classification of Costs Related to Defined Benefit Pension and Other Post-retirement Benefit Plans | Classification of Costs Related to Defined Benefit Pension and Other Post-retirement Benefit Plans (ASU 2017-07) At the beginning of fiscal 2018, the Company adopted ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost ("ASU 2017-07"). ASU 2017-07 changes how employers that sponsor defined benefit pension and/or other post-retirement benefit plans present the net periodic benefit costs in the statement of operations. Under this new guidance, an employer's statement of operations presents service cost arising in the current period in the same statement line item as other employee compensation. However, all other components of current period costs related to defined benefit plans, such as prior service costs and actuarial gains and losses, are presented on the statement of operations on a line item outside (or below) operating income. ASU 2017-07 affects only the classification of certain costs on the statement of operations, not the determination of costs. Net periodic pension costs related to the Company's frozen defined benefit pension plan and post-retirement medical benefit plan were not material for the third quarter of fiscal 2018, three fiscal quarters of 2018, or prior periods. Prior period results have not been reclassified on the Company's statement of operations due to materiality. |
Modifications to Share-based Compensation Awards | Modifications to Share-based Compensation Awards (ASU 2017-09) At the beginning of fiscal 2018, the Company adopted ASU No. 2017-09, Compensation-Stock Compensation Topic 718-Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 clarifies when changes to the terms and conditions of share-based payment awards must be accounted for as modifications. Entities apply the modification accounting guidance if the value, vesting conditions, or classification of an award changes. The Company has not modified any share-based payment awards. If the Company modifies share-based payment awards in the future, it will apply the provisions of ASU 2017-09. |
Definition of a Business | Definition of a Business (ASU 2017-01) At the beginning of fiscal 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 assists entities in determining if acquired assets constitute the acquisition of a business or the acquisition of assets for accounting and reporting purposes. This distinction is important because goodwill can only be recognized in an acquisition of a business. Prior to ASU 2017-01, if revenues were generated immediately before and after a transaction, the acquisition was typically considered a business. Under ASU 2017-01, entities are required to further assess the substance of the processes they acquire. If the Company commences or completes an acquisition in future periods, it will apply the provisions of ASU 2017-01. |
Statement of Cash Flows | Statement of Cash Flows (ASU 2016-15) At the beginning of fiscal 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) ("ASU 2016-15"). ASU 2016-15 represents a consensus of the FASB’s Emerging Issues Task Force on eight separate issues that, if present, can impact classifications on the statement of cash flows. The guidance requires application using a retrospective transition method. The adoption of ASU 2016-15 only impacted the classification of certain insurance proceeds on the Company's consolidated statement of cash flows for the first three quarters of fiscal 2018. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
ASC 606 Initial Application | The effects of retrospective adoption on the Company's consolidated Statements of Operations were as follows: Third Quarter Three Fiscal Quarters Year Year (dollars in thousands, except per share data) Fiscal 2017 Fiscal 2017 Fiscal 2017 Fiscal 2016 Net sales $ (186 ) $ (480 ) $ 92 $ (637 ) Cost of goods sold $ 84 $ 110 $ 52 $ (7 ) Income before income taxes $ (270 ) $ (590 ) $ 40 $ (630 ) Net income $ (170 ) $ (371 ) $ 84 $ (397 ) Basic net income per common share $ — $ (0.01 ) $ — $ (0.01 ) Diluted net income per common share $ — $ (0.01 ) $ — $ — The cumulative effect to the Company’s retained earnings at January 2, 2016 was an after-tax increase of approximately $0.6 million . The effects of adoption of ASC 606 on the Company’s consolidated balance sheet at December 30, 2017 were as follows: (dollars in thousands) As Previously Reported ASC 606 Adjustments As Amended for ASC 606 ASSETS Prepaid expenses and other current assets $ 49,892 $ 3,043 (1) $ 52,935 Total current assets $ 1,017,669 $ 3,043 $ 1,020,712 Total assets $ 2,067,999 $ 3,043 $ 2,071,042 LIABILITIES AND STOCKHOLDERS' EQUITY Other current liabilities $ 146,510 $ 2,624 (2) $ 149,134 Total current liabilities $ 328,624 $ 2,624 $ 331,248 Deferred income taxes $ 84,848 $ 96 $ 84,944 Total liabilities $ 1,210,906 $ 2,720 $ 1,213,626 Retained earnings 885,714 323 (3) 886,037 Total stockholder's equity $ 857,093 $ 323 $ 857,416 Total liabilities and stockholders' equity $ 2,067,999 $ 3,043 $ 2,071,042 (1) Reclassification of estimated inventory expected to be returned by customers through future sales refund transactions. This amount was reclassified from the returns reserve (current liability) to a current asset. Prior to the Company's adoption of ASC 606, the Company's returns reserve (current liability) was reported net of the estimated inventory expected to be returned by customers through sales refund transactions. (2) Amount includes a reclassification of approximately $3.0 million for estimated inventory expected to be returned by customers, partially offset by a reclassification of approximately $0.4 million for gift card liabilities. (3) Cumulative impact of approximately $0.6 million for after-tax adjustments to retained earnings at the beginning of fiscal 2016, offset by ASC 606 effects on fiscal 2017 and fiscal 2016 results of operations. The retrospective adoption of ASC 606 at the beginning of fiscal 2018 also had the following effects on the Company’s unaudited condensed consolidated balance sheet at September 30, 2017: (dollars in thousands) As Previously Reported ASC 606 Adjustments As Amended for ASC 606 ASSETS Prepaid expenses and other current assets $ 48,083 $ 2,873 (1) $ 50,956 Total current assets $ 1,049,100 $ 2,873 $ 1,051,973 Total assets $ 2,104,063 $ 2,873 $ 2,106,936 LIABILITIES AND STOCKHOLDERS' EQUITY Other current liabilities $ 134,031 $ 3,083 (2) $ 137,114 Total current liabilities $ 327,909 $ 3,083 $ 330,992 Deferred income taxes $ 138,239 $ (78 ) 138,161 Total liabilities $ 1,332,100 $ 3,005 $ 1,335,105 Retained earnings $ 797,985 $ (132 ) (3) $ 797,853 Total stockholder's equity $ 771,963 $ (132 ) $ 771,831 Total liabilities and stockholders' equity $ 2,104,063 $ 2,873 $ 2,106,936 (1) Reclassification of estimated inventory expected to be returned by customers through future sales refund transactions. This amount was reclassified from the returns reserve (current liability) to a current asset. Prior to the Company's adoption of ASC 606, the Company's returns reserve (current liability) was reported net of the estimated inventory expected to be returned by customers through sales refund transactions. (2) Amount includes a reclassification of approximately $2.9 million for estimated inventory expected to be returned by customers and an adjustment of approximately $0.2 million for gift card liabilities. (3) Cumulative impact of approximately $0.6 million for after-tax adjustments to retained earnings at the beginning of fiscal 2016, offset by ASC 606 impact on fiscal 2017 and fiscal 2016 results of operations. |
Disaggregation of Revenue | Disaggregation of Revenue The Company sells its products directly to consumers ("direct-to-consumer") and to other retail companies and partners that subsequently sell the products directly to their own retail customers. The Company also earns royalties from its licensees. Disaggregated revenues from these sources for the third quarter and three quarters ended fiscal 2018 and 2017 were as follows: Fiscal quarter ended September 29, 2018 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 338,963 $ 54,373 $ 393,336 Direct-to-consumer 459,101 — 71,470 530,571 $ 459,101 $ 338,963 $ 125,843 $ 923,907 Royalty income $ 3,614 $ 5,891 $ 719 $ 10,224 Three fiscal quarters ended September 29, 2018 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 829,272 $ 117,255 $ 946,527 Direct-to-consumer 1,244,863 — 184,500 1,429,363 $ 1,244,863 $ 829,272 $ 301,755 $ 2,375,890 Royalty income $ 9,625 $ 16,693 $ 2,255 $ 28,573 Fiscal quarter ended September 30, 2017 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 369,577 $ 55,524 $ 425,101 Direct-to-consumer 453,843 — 69,102 522,945 $ 453,843 $ 369,577 $ 124,626 $ 948,046 Royalty income $ 3,038 $ 6,648 $ 664 $ 10,350 Three fiscal quarters ended September 30, 2017 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 879,842 $ 112,827 $ 992,669 Direct-to-consumer 1,209,143 — 170,812 1,379,955 $ 1,209,143 $ 879,842 $ 283,639 $ 2,372,624 Royalty income $ 11,201 $ 18,153 $ 2,764 $ 32,118 Accounts Receivable from Customers and Licensees The components of Accounts receivable, net, were as follows: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Trade receivables from wholesale customers, net $ 281,190 $ 229,968 $ 274,238 Royalties receivable 9,667 9,818 9,331 Tenant allowances and other receivables 14,165 14,511 13,863 Total gross receivables $ 305,022 $ 254,297 $ 297,432 Less: Wholesale accounts receivable reserves (11,533 ) (13,736 ) (11,781 ) Accounts receivable, net $ 293,489 $ 240,561 $ 285,651 |
Contract Liabilities | Contract Assets and Liabilities The Company's contract assets are not material. Contract Liabilities The Company recognizes a contract liability when it has received consideration from the customer and has a future obligation to transfer goods to the customer. Total contract liabilities consisted of the following amounts: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Contract liabilities-current: Unredeemed gift cards $ 11,304 $ 11,945 $ 10,236 Unredeemed customer loyalty rewards 8,441 7,355 8,485 Total contract liabilities-current (*) $ 19,745 $ 19,300 $ 18,721 * Included with Other current liabilities on the Company's consolidated balance sheet. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss consisted of the following: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Cumulative foreign currency translation adjustments $ (24,510 ) $ (21,285 ) $ (19,380 ) Pension and post-retirement obligations (*) (7,808 ) (7,808 ) (7,116 ) Total accumulated other comprehensive loss $ (32,318 ) $ (29,093 ) $ (26,496 ) (*) Net of income taxes of $4.4 million , $4.4 million , and $4.2 million , respectively. The deferred income taxes associated with these obligations are subject to adjustments upon the Company's adoption of ASC 2018-02. See Note 16, Pending Adoption of Recent Accounting Pronouncements . |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated amortization expense for the next five fiscal years is as follows: (dollars in thousands) Amortization 2019 $ 3,751 2020 $ 3,751 2021 $ 3,751 2022 $ 3,751 2023 $ 3,708 |
Intangible assets table | The Company's goodwill and intangible assets were as follows: September 29, 2018 December 30, 2017 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ 136,570 $ 136,570 $ 136,570 Canada goodwill Indefinite 41,074 41,074 42,223 42,223 Skip Hop goodwill Indefinite 45,976 45,976 45,997 45,997 Carter's Mexico goodwill Indefinite 5,991 5,991 5,634 5,634 Total goodwill $ 229,611 $ 229,611 $ 230,424 $ 230,424 Carter's tradename Indefinite $ 220,233 $ 220,233 $ 220,233 $ 220,233 OshKosh tradename Indefinite 85,500 85,500 85,500 85,500 Skip Hop tradename Indefinite 56,800 56,800 56,800 56,800 Finite-life tradenames 5-20 years 3,911 $ 690 3,221 3,550 $ 532 3,018 Total tradenames, net $ 366,444 $ 690 $ 365,754 $ 366,083 $ 532 $ 365,551 Skip Hop customer relationships 15 years $ 47,300 $ 4,686 $ 42,614 $ 47,300 $ 2,304 $ 44,996 Carter's Mexico customer relationships 10 years 3,289 378 2,911 3,135 135 3,000 Total customer relationships, net $ 50,589 $ 5,064 $ 45,525 $ 50,435 $ 2,439 $ 47,996 September 30, 2017 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ 136,570 Canada goodwill Indefinite 42,514 42,514 Skip Hop goodwill Indefinite 49,190 49,190 Carter's Mexico goodwill Indefinite 5,919 5,919 Total goodwill $ 234,193 $ 234,193 Carter's tradename Indefinite $ 220,233 $ 220,233 OshKosh tradename Indefinite 85,500 85,500 Skip Hop tradename Indefinite 56,800 56,800 Finite-life tradenames 5-20 years 42,040 $ 38,978 3,062 Total tradenames, net $ 404,573 $ 38,978 $ 365,595 Skip Hop customer relationships, net 15 years $ 44,800 $ 1,554 $ 43,246 Carter's Mexico customer relationships 10 years 3,376 — 3,376 Total customer relationships, net $ 48,176 $ 1,554 $ 46,622 |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Shares Repurchased and Retired | The Company repurchased and retired shares in open market transactions in the following amounts for the fiscal periods indicated: Fiscal quarter ended Three fiscal quarters ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Number of shares repurchased 543,793 596,178 1,364,420 1,727,587 Aggregate cost of shares repurchased (dollars in thousands) $ 56,401 $ 52,742 $ 145,493 $ 150,974 Average price per share $ 103.72 $ 88.47 $ 106.63 $ 87.39 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Senior notes at amounts repayable $ 400,000 $ 400,000 $ 400,000 Less unamortized issuance-related costs for senior notes (2,980 ) (3,694 ) (3,926 ) Senior notes, net 397,020 396,306 396,074 Secured revolving credit facility 401,000 221,000 291,000 Total long-term debt, net $ 798,020 $ 617,306 $ 687,074 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of recorded stock-based compensation cost | The Company recorded stock-based compensation expense as follows: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Stock options $ 1,148 $ 983 $ 3,604 $ 3,182 Restricted stock: Time-based awards 1,881 1,706 5,989 5,668 Performance-based awards (1,185 ) 1,116 1,314 3,419 Stock awards — — 1,203 1,182 Total $ 1,844 $ 3,805 $ 12,110 $ 13,451 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities that are remeasured at fair value | The following table summarizes assets and liabilities that are remeasured at fair value each reporting period: September 29, 2018 December 30, 2017 September 30, 2017 (dollars in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Investments (1) $ 17.6 — — $ 16.7 — — $ 15.7 — — Liabilities Foreign exchange forward contracts (2) — — — — — — — $ 0.2 — (1) Included in Other assets on the Company's consolidated balance sheet. (2) Included in Other current liabilities on the Company's consolidated balance sheet. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding | The following is a reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding: Fiscal quarter ended Three fiscal quarters ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 45,990,039 47,303,074 46,399,746 47,829,794 Dilutive effect of equity awards 490,283 541,325 538,422 549,213 Diluted number of common and common equivalent shares outstanding 46,480,322 47,844,399 46,938,168 48,379,007 Basic net income per common share (in thousands, except per share data): Net income $ 71,770 $ 82,316 $ 151,506 $ 166,703 Income allocated to participating securities (540 ) (651 ) (1,142 ) (1,311 ) Net income available to common shareholders $ 71,230 $ 81,665 $ 150,364 $ 165,392 Basic net income per common share $ 1.55 $ 1.73 $ 3.24 $ 3.46 Diluted net income per common share (in thousands, except per share data): Net income $ 71,770 $ 82,316 $ 151,506 $ 166,703 Income allocated to participating securities (536 ) (645 ) (1,134 ) (1,301 ) Net income available to common shareholders $ 71,234 $ 81,671 $ 150,372 $ 165,402 Diluted net income per common share $ 1.53 $ 1.71 $ 3.20 $ 3.42 Anti-dilutive awards excluded from diluted earnings per share computation 326,129 662,130 266,646 618,826 |
OTHER CURRENT AND LONG-TERM L_2
OTHER CURRENT AND LONG-TERM LIABILITIES (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | Other current liabilities that exceeded five percent of total current liabilities, at the end of any comparable period, were as follows: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Accrued bonuses and incentive compensation $ 6,286 $ 27,566 $ 9,328 Income taxes payable 21,124 16,252 28,393 Accrued employee benefits 13,987 21,735 12,503 Accrued and deferred rent 19,137 18,213 18,160 |
Schedule of other long-term liabilities | Other long-term liabilities that exceeded five percent of total liabilities, at the end of any comparable period, were as follows: (dollars in thousands) September 29, 2018 December 30, 2017 September 30, 2017 Deferred lease incentives $ 75,331 $ 75,104 $ 76,599 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The table below presents certain information for our reportable segments and unallocated corporate expenses for the periods indicated. Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) September 29, % of September 30, % of September 29, % of September 30, % of Net sales : U.S. Retail $ 459,101 49.7 % $ 453,843 47.9 % $ 1,244,863 52.4 % $ 1,209,143 50.9 % U.S. Wholesale 338,963 36.7 % 369,577 39.0 % 829,272 34.9 % 879,842 37.1 % International 125,843 13.6 % 124,626 13.1 % 301,755 12.7 % 283,639 12.0 % Total net sales $ 923,907 100.0 % $ 948,046 100.0 % $ 2,375,890 100.0 % $ 2,372,624 100.0 % Operating income (loss) : % of Segment Net Sales % of Segment Net Sales % of % of U.S. Retail (1)(5) $ 47,139 10.3 % $ 55,519 12.2 % $ 122,086 9.8 % $ 127,441 10.5 % U.S. Wholesale (2)(5) 67,785 20.0 % 78,572 21.3 % 148,395 17.9 % 184,073 20.9 % International (5)(6) 12,434 9.9 % 16,726 13.4 % 20,508 6.8 % 28,008 9.9 % Corporate expenses (3)(4) (23,801 ) (20,369 ) (70,152 ) (66,307 ) Total operating income $ 103,557 11.2 % $ 130,448 13.8 % $ 220,837 9.3 % $ 273,215 11.5 % (1) Includes insurance recoveries of approximately $0.4 million associated with storm-related store closures in 2017 for the three fiscal quarters ended September 29, 2018 . (2) Includes approximately $12.8 million of charges related to a customer bankruptcy for the three fiscal quarters ended September 29, 2018 . (3) Corporate expenses include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, office occupancy, information technology, certain legal fees, consulting fees, and audit fees. (4) Includes the following charges: Fiscal quarter ended Three fiscal quarters ended (dollars in millions) September 29, September 30, September 29, September 30, Acquisition contingency fair value adjustment $ — $ (3.6 ) $ — $ (3.6 ) Direct sourcing initiative $ — $ 0.1 $ — $ 0.3 Acquisition-related costs $ — $ 0.8 $ — $ 3.3 (5) Includes $0.4 million and $0.8 million of certain costs related to inventory acquired from Skip Hop in operating income between U.S. Wholesale, U.S. Retail, and International for the fiscal quarter and three fiscal quarters ended September 30, 2017 , respectively. (6) Fiscal quarter and three fiscal quarters ended September 29, 2018 include approximately $3.5 million in costs associated with changes to the Company's business model in China, which includes inventory and severance charges. |
GUARANTOR UNAUDITED CONDENSED_2
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets (unaudited) As of September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 70,518 $ 19,755 $ 33,625 $ — $ 123,898 Accounts receivable, net — 235,167 38,986 19,336 — 293,489 Intercompany receivable — 131,518 123,104 47,869 (302,491 ) — Finished goods inventories — 385,969 261,141 78,694 (32,819 ) 692,985 Prepaid expenses and other current assets — 21,690 23,431 11,879 — 57,000 Total current assets — 844,862 466,417 191,403 (335,310 ) 1,167,372 Property, plant, and equipment, net — 137,709 185,203 37,806 — 360,718 Goodwill — 136,570 45,368 47,673 — 229,611 Tradenames, net — 223,117 142,637 — — 365,754 Customer relationships, net — — 42,614 2,911 — 45,525 Other assets — 25,422 1,690 1,854 — 28,966 Intercompany long-term receivable — — 490,514 — (490,514 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 811,185 1,117,864 283,169 — (2,212,218 ) — Total assets $ 811,185 $ 2,585,544 $ 1,657,612 $ 281,647 $ (3,138,042 ) $ 2,197,946 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 121,721 $ 45,351 $ 18,213 $ — $ 185,285 Intercompany payables — 164,290 132,713 5,488 (302,491 ) — Other current liabilities — 40,703 75,358 16,960 — 133,021 Total current liabilities — 326,714 253,422 40,661 (302,491 ) 318,306 Long-term debt — 798,020 — — — 798,020 Deferred income taxes — 45,480 41,820 588 — 87,888 Intercompany long-term liability — 490,514 — — (490,514 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 80,812 88,860 12,875 — 182,547 Stockholders' equity 811,185 844,004 1,173,510 227,523 (2,245,037 ) 811,185 Total liabilities and stockholders' equity $ 811,185 $ 2,585,544 $ 1,657,612 $ 281,647 $ (3,138,042 ) $ 2,197,946 As of December 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 129,463 $ 10,030 $ 39,001 $ — $ 178,494 Accounts receivable, net — 182,944 40,286 17,331 — 240,561 Intercompany receivable — 87,702 162,007 58,980 (308,689 ) — Finished goods inventories — 296,065 206,556 66,569 (20,468 ) 548,722 Prepaid expenses and other current assets — 17,012 21,354 14,569 — 52,935 Total current assets — 713,186 440,233 196,450 (329,157 ) 1,020,712 Property, plant, and equipment, net — 147,858 189,511 40,555 — 377,924 Goodwill — 136,570 45,368 48,486 — 230,424 Tradenames, net — 223,251 142,300 — — 365,551 Customer relationships, net — — 44,996 3,000 — 47,996 Other assets — 23,884 2,392 2,159 — 28,435 Intercompany long-term receivable — — 441,294 — (441,294 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 857,416 1,053,224 231,994 — (2,142,634 ) — Total assets $ 857,416 $ 2,397,973 $ 1,538,088 $ 290,650 $ (3,013,085 ) $ 2,071,042 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 115,658 $ 49,313 $ 17,143 $ — $ 182,114 Intercompany payables — 215,573 91,697 1,419 (308,689 ) — Other current liabilities — 11,805 122,989 14,340 — 149,134 Total current liabilities — 343,036 263,999 32,902 (308,689 ) 331,248 Long-term debt — 617,306 — — — 617,306 Deferred income taxes — 46,619 37,647 678 — 84,944 Intercompany long-term liability — 441,294 — — (441,294 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 71,834 92,570 15,724 — 180,128 Stockholders' equity 857,416 877,884 1,043,872 241,346 (2,163,102 ) 857,416 Total liabilities and stockholders' equity $ 857,416 $ 2,397,973 $ 1,538,088 $ 290,650 $ (3,013,085 ) $ 2,071,042 As of September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 56,715 $ 17,771 $ 30,884 $ — $ 105,370 Accounts receivable, net — 229,425 37,165 19,061 — 285,651 Intercompany receivable — 113,950 114,420 35,964 (264,334 ) — Finished goods inventories — 311,260 245,934 74,631 (21,829 ) 609,996 Prepaid expenses and other current assets — 18,339 22,342 10,275 — 50,956 Total current assets — 729,689 437,632 170,815 (286,163 ) 1,051,973 Property, plant, and equipment, net — 149,889 192,065 40,060 — 382,014 Goodwill — 136,570 48,566 49,057 — 234,193 Tradenames, net — 223,295 142,300 — — 365,595 Customer relationships, net — — 43,246 3,376 — 46,622 Other assets — 23,274 1,533 1,732 — 26,539 Intercompany long-term receivable — — 411,787 — (411,787 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 771,831 983,575 204,093 — (1,959,499 ) — Total assets $ 771,831 $ 2,346,292 $ 1,481,222 $ 265,040 $ (2,757,449 ) $ 2,106,936 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 120,892 $ 54,334 $ 18,652 $ — $ 193,878 Intercompany payables — 148,416 111,972 3,946 (264,334 ) — Other current liabilities — 45,656 78,381 13,077 — 137,114 Total current liabilities — 314,964 244,687 35,675 (264,334 ) 330,992 Long-term debt — 687,074 — — — 687,074 Deferred income taxes — 70,290 66,972 899 — 138,161 Intercompany long-term liability — 411,787 — — (411,787 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 68,517 95,329 15,032 — 178,878 Stockholders' equity 771,831 793,660 974,234 213,434 (1,981,328 ) 771,831 Total liabilities and stockholders' equity $ 771,831 $ 2,346,292 $ 1,481,222 $ 265,040 $ (2,757,449 ) $ 2,106,936 |
Condensed Consolidating Statements of Operations | Condensed Consolidating Statements of Operations (unaudited) For the fiscal quarter ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 570,007 $ 506,994 $ 119,182 $ (272,276 ) $ 923,907 Cost of goods sold — 424,895 309,123 60,701 (258,262 ) 536,457 Gross profit — 145,112 197,871 58,481 (14,014 ) 387,450 Royalty income, net — 8,515 5,320 — (3,611 ) 10,224 Selling, general, and administrative expenses — 53,008 214,036 34,888 (7,815 ) 294,117 Operating income (loss) — 100,619 (10,845 ) 23,593 (9,810 ) 103,557 Interest expense — 9,866 1,329 — (1,327 ) 9,868 Interest income — (1,329 ) (2 ) (80 ) 1,327 (84 ) (Income) loss in subsidiaries (71,770 ) (6,446 ) (21,608 ) — 99,824 — Other (income) expense, net — — 235 (301 ) — (66 ) Income (loss) before income taxes 71,770 98,528 9,201 23,974 (109,634 ) 93,839 Provision for income taxes — 16,948 2,755 2,366 — 22,069 Net income (loss) $ 71,770 $ 81,580 $ 6,446 $ 21,608 $ (109,634 ) $ 71,770 For the fiscal quarter ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 587,022 $ 506,272 $ 106,105 $ (251,353 ) $ 948,046 Cost of goods sold — 423,433 297,858 59,500 (236,323 ) 544,468 Gross profit — 163,589 208,414 46,605 (15,030 ) 403,578 Royalty income, net — 8,245 5,501 — (3,396 ) 10,350 Selling, general, and administrative expenses — 49,368 210,175 32,704 (8,767 ) 283,480 Operating income — 122,466 3,740 13,901 (9,659 ) 130,448 Interest expense — 8,013 1,375 — (1,327 ) 8,061 Interest income — (1,330 ) — (38 ) 1,327 (41 ) (Income) loss in subsidiaries (82,316 ) (4,555 ) (11,037 ) — 97,908 — Other (income) expense, net — (120 ) 123 (818 ) — (815 ) Income (loss) before income taxes 82,316 120,458 13,279 14,757 (107,567 ) 123,243 Provision for income taxes — 28,483 8,724 3,720 — 40,927 Net income (loss) $ 82,316 $ 91,975 $ 4,555 $ 11,037 $ (107,567 ) $ 82,316 For the three fiscal quarters ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,376,806 $ 1,379,293 $ 298,148 $ (678,357 ) $ 2,375,890 Cost of goods sold — 1,028,751 820,721 147,498 (650,965 ) 1,346,005 Gross profit — 348,055 558,572 150,650 (27,392 ) 1,029,885 Royalty income, net — 24,043 13,739 — (9,209 ) 28,573 Selling, general, and administrative expenses — 137,246 626,125 98,500 (24,250 ) 837,621 Operating income (loss) — 234,852 (53,814 ) 52,150 (12,351 ) 220,837 Interest expense — 25,778 3,983 10 (3,981 ) 25,790 Interest income — (3,999 ) (2 ) (454 ) 3,981 (474 ) (Income) loss in subsidiaries (151,506 ) 14,593 (45,032 ) — 181,945 — Other expense, net — 19 360 149 — 528 Income (loss) before income taxes 151,506 198,461 (13,123 ) 52,445 (194,296 ) 194,993 Provision for income taxes — 34,604 1,470 7,413 — 43,487 Net income (loss) $ 151,506 $ 163,857 $ (14,593 ) $ 45,032 $ (194,296 ) $ 151,506 For the three fiscal quarters ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,393,351 $ 1,337,078 $ 239,022 $ (596,827 ) $ 2,372,624 Cost of goods sold — 1,014,968 783,973 133,948 (582,782 ) 1,350,107 Gross profit — 378,383 553,105 105,074 (14,045 ) 1,022,517 Royalty income, net — 25,580 14,508 — (7,970 ) 32,118 Selling, general, and administrative expenses — 128,595 593,544 85,267 (25,986 ) 781,420 Operating income (loss) — 275,368 (25,931 ) 19,807 3,971 273,215 Interest expense — 22,124 4,121 95 (3,981 ) 22,359 Interest income — (4,169 ) — (71 ) 3,981 (259 ) (Income) loss in subsidiaries (166,703 ) 23,699 (15,395 ) — 158,399 — Other (income) expense, net — (745 ) 771 (1,606 ) — (1,580 ) Income (loss) before income taxes 166,703 234,459 (15,428 ) 21,389 (154,428 ) 252,695 Provision for income taxes — 71,727 8,271 5,994 — 85,992 Net income (loss) $ 166,703 $ 162,732 $ (23,699 ) $ 15,395 $ (154,428 ) $ 166,703 |
Condensed Consolidating Statements of Comprehensive Income | Condensed Consolidating Statements of Comprehensive Income (unaudited) For the fiscal quarter ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 71,770 $ 81,580 $ 6,446 $ 21,608 $ (109,634 ) $ 71,770 Foreign currency translation adjustments 3,213 3,213 3,213 3,213 (9,639 ) 3,213 Comprehensive income (loss) $ 74,983 $ 84,793 $ 9,659 $ 24,821 $ (119,273 ) $ 74,983 For the fiscal quarter ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 82,316 $ 91,975 $ 4,555 $ 11,037 $ (107,567 ) $ 82,316 Foreign currency translation adjustments 4,157 4,157 4,157 4,157 (12,471 ) 4,157 Comprehensive income (loss) $ 86,473 $ 96,132 $ 8,712 $ 15,194 $ (120,038 ) $ 86,473 For the three fiscal quarters ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 151,506 $ 163,857 $ (14,593 ) $ 45,032 $ (194,296 ) $ 151,506 Foreign currency translation adjustments (3,225 ) (3,225 ) (3,225 ) (3,225 ) 9,675 (3,225 ) Comprehensive income (loss) $ 148,281 $ 160,632 $ (17,818 ) $ 41,807 $ (184,621 ) $ 148,281 For the three fiscal quarters ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 166,703 $ 162,732 $ (23,699 ) $ 15,395 $ (154,428 ) $ 166,703 Foreign currency translation adjustments 8,244 8,244 8,244 8,244 (24,732 ) 8,244 Comprehensive income (loss) $ 174,947 $ 170,976 $ (15,455 ) $ 23,639 $ (179,160 ) $ 174,947 |
Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows (unaudited) For the three fiscal quarters ended September 29, 2018 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows (used in) provided by operating activities: $ — $ (11,296 ) $ (16,349 ) $ 49,003 $ — $ 21,358 Cash flows from investing activities: Capital expenditures — (13,121 ) (30,056 ) (4,667 ) — (47,844 ) Intercompany investing activity 206,622 (2,116 ) 3,024 1,077 (208,607 ) — Acquisitions of businesses, net of cash acquired — — — 96 — 96 Disposals and recoveries from property, plant, and equipment — — 369 7 — 376 Net cash provided by (used in) investing activities 206,622 (15,237 ) (26,663 ) (3,487 ) (208,607 ) (47,372 ) Cash flows from financing activities: Intercompany financing activity — (211,522 ) (12,263 ) 15,178 208,607 — Payment of debt issuance costs — (890 ) — — — (890 ) Borrowings under secured revolving credit facility — 290,000 — — — 290,000 Payments on secured revolving credit facility — (110,000 ) — — — (110,000 ) Dividends paid (63,114 ) — 65,000 (65,000 ) — (63,114 ) Repurchases of common stock (145,493 ) — — — — (145,493 ) Withholdings from vestings of restricted stock (6,747 ) — — — — (6,747 ) Proceeds from exercises of stock options 8,732 — — — — 8,732 Net cash (used in) provided by financing activities (206,622 ) (32,412 ) 52,737 (49,822 ) 208,607 (27,512 ) Effect of exchange rate changes on cash — — — (1,070 ) — (1,070 ) Net (decrease) increase in cash and cash equivalents — (58,945 ) 9,725 (5,376 ) — (54,596 ) Cash and cash equivalents, beginning of period — 129,463 10,030 39,001 — 178,494 Cash and cash equivalents, end of period $ — $ 70,518 $ 19,755 $ 33,625 $ — $ 123,898 For the three fiscal quarters ended September 30, 2017 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows provided by operating activities: $ — $ 53,299 $ 54,934 $ 9,273 $ — $ 117,506 Cash flows from investing activities: Capital expenditures — (16,678 ) (28,867 ) (6,111 ) — (51,656 ) Intercompany investing activity 204,931 (510 ) — — (204,421 ) — Acquisition of business, net of cash acquired — (144,520 ) 746 (15,591 ) — (159,365 ) Net cash provided by (used in) investing activities 204,931 (161,708 ) (28,121 ) (21,702 ) (204,421 ) (211,021 ) Cash flows from financing activities: Intercompany financing activity — (186,794 ) (20,859 ) 3,232 204,421 — Payment of debt issuance costs — (2,138 ) — — — (2,138 ) Borrowings under secured revolving credit facility — 200,000 — — — 200,000 Payments on secured revolving credit facility — (75,000 ) — (18,965 ) — (93,965 ) Dividends paid (53,443 ) — — — — (53,443 ) Repurchases of common stock (150,974 ) — — — — (150,974 ) Withholdings from vestings of restricted stock (5,654 ) — — — — (5,654 ) Proceeds from exercises of stock options 5,140 — — — — 5,140 Net cash (used in) provided by financing activities (204,931 ) (63,932 ) (20,859 ) (15,733 ) 204,421 (101,034 ) Effect of exchange rate changes on cash — — — 561 — 561 Net (decrease) increase in cash and cash equivalents — (172,341 ) 5,954 (27,601 ) — (193,988 ) Cash and cash equivalents, beginning of period — 229,056 11,817 58,485 — 299,358 Cash and cash equivalents, end of period $ — $ 56,715 $ 17,771 $ 30,884 $ — $ 105,370 |
THE COMPANY (Details)
THE COMPANY (Details) | Sep. 29, 2018store |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of stores | 1,061 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Net sales | $ 923,907 | $ 948,046 | $ 2,375,890 | $ 2,372,624 | |||
Cost of goods sold | 536,457 | 544,468 | 1,346,005 | 1,350,107 | |||
Income before income taxes | 93,839 | 123,243 | 194,993 | 252,695 | |||
Net income | $ 71,770 | $ 82,316 | $ 151,506 | $ 166,703 | |||
Basic net income per common share (USD per share) | $ 1.55 | $ 1.73 | $ 3.24 | $ 3.46 | |||
Diluted net income per common share (USD per share) | $ 1.53 | $ 1.71 | $ 3.20 | $ 3.42 | |||
Total current assets | $ 1,167,372 | $ 1,051,973 | $ 1,167,372 | $ 1,051,973 | $ 1,020,712 | ||
Total assets | 2,197,946 | 2,106,936 | 2,197,946 | 2,106,936 | 2,071,042 | ||
Other current liabilities | 133,021 | 137,114 | 133,021 | 137,114 | 149,134 | ||
Total current liabilities | 318,306 | 330,992 | 318,306 | 330,992 | 331,248 | ||
Total liabilities | 1,386,761 | 1,335,105 | 1,386,761 | 1,335,105 | 1,213,626 | ||
Retained earnings | 843,043 | 797,853 | 843,043 | 797,853 | 886,037 | ||
Total retained earnings | 843,043 | 797,853 | 843,043 | 797,853 | 886,037 | ||
Total stockholders' equity | 811,185 | 771,831 | 811,185 | 771,831 | 857,416 | ||
Total liabilities and stockholders' equity | 2,197,946 | 2,106,936 | 2,197,946 | 2,106,936 | 2,071,042 | ||
Unredeemed customer loyalty program points reserve | 8,441 | 8,485 | 8,441 | 8,485 | 7,355 | ||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 923,907 | 2,375,890 | 948,046 | 2,372,624 | |||
Accounts receivable, gross | 305,022 | 297,432 | 305,022 | 297,432 | 254,297 | ||
Accounts receivable, net | 293,489 | 285,651 | 293,489 | 285,651 | 240,561 | ||
Contract Liabilities | |||||||
Unredeemed gift cards | 11,304 | 10,236 | 11,304 | 10,236 | 11,945 | ||
Unredeemed customer loyalty program points reserve | 8,441 | 8,485 | 8,441 | 8,485 | 7,355 | ||
Total contract liabilities-current | 19,745 | 18,721 | 19,745 | 18,721 | 19,300 | ||
Allowance for Doubtful Accounts | |||||||
Disaggregation of Revenue | |||||||
Less: reserve | (11,533) | (11,781) | (11,533) | (11,781) | (13,736) | ||
Trade receivables from wholesale customers, net | |||||||
Disaggregation of Revenue | |||||||
Accounts receivable, gross | 281,190 | 274,238 | 281,190 | 274,238 | 229,968 | ||
Royalties receivable | |||||||
Disaggregation of Revenue | |||||||
Accounts receivable, gross | 9,667 | 9,331 | 9,667 | 9,331 | 9,818 | ||
Tenant allowances and other receivables | |||||||
Disaggregation of Revenue | |||||||
Accounts receivable, gross | 14,165 | 13,863 | 14,165 | 13,863 | 14,511 | ||
Wholesale channel | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 393,336 | 946,527 | 425,101 | 992,669 | |||
Direct-to-consumer | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 530,571 | 1,429,363 | 522,945 | 1,379,955 | |||
Royalty income | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 10,224 | 28,573 | 10,350 | 32,118 | |||
Retail | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 459,101 | 1,244,863 | 453,843 | 1,209,143 | |||
Retail | Wholesale channel | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 0 | 0 | 0 | 0 | |||
Retail | Direct-to-consumer | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 459,101 | 1,244,863 | 453,843 | 1,209,143 | |||
Retail | Royalty income | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 3,614 | 9,625 | 3,038 | 11,201 | |||
Wholesale | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 338,963 | 829,272 | 369,577 | 879,842 | |||
Wholesale | Wholesale channel | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 338,963 | 829,272 | 369,577 | 879,842 | |||
Wholesale | Direct-to-consumer | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 0 | 0 | 0 | 0 | |||
Wholesale | Royalty income | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 5,891 | 16,693 | 6,648 | 18,153 | |||
International | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 125,843 | 301,755 | 124,626 | 283,639 | |||
International | Wholesale channel | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 54,373 | 117,255 | 55,524 | 112,827 | |||
International | Direct-to-consumer | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | 71,470 | 184,500 | 69,102 | 170,812 | |||
International | Royalty income | |||||||
Disaggregation of Revenue | |||||||
Disaggregated revenue | $ 719 | 2,255 | $ 664 | 2,764 | |||
ASC 606 | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Basic and diluted net income (USD per share) | $ 0.01 | ||||||
Net sales | (186) | (480) | 92 | $ (637) | |||
Cost of goods sold | 84 | 110 | 52 | (7) | |||
Income before income taxes | (270) | (590) | 40 | (630) | |||
Net income | $ (170) | $ (371) | $ 84 | $ (397) | |||
Basic net income per common share (USD per share) | $ 0 | $ (0.01) | $ 0 | $ (0.01) | |||
Diluted net income per common share (USD per share) | $ 0 | $ (0.01) | $ 0 | $ 0 | |||
Other current assets | $ 50,956 | $ 50,956 | $ 52,935 | ||||
Total current assets | 1,051,973 | 1,051,973 | 1,020,712 | ||||
Total assets | 2,106,936 | 2,106,936 | 2,071,042 | ||||
Other current liabilities | 137,114 | 137,114 | 149,134 | ||||
Total current liabilities | 330,992 | 330,992 | 331,248 | ||||
Deferred income taxes | 138,161 | 138,161 | 84,944 | ||||
Total liabilities | 1,335,105 | 1,335,105 | 1,213,626 | ||||
Retained earnings | 797,853 | 797,853 | 886,037 | ||||
Total retained earnings | 797,853 | 797,853 | 886,037 | ||||
Total stockholders' equity | 771,831 | 771,831 | 857,416 | ||||
Total liabilities and stockholders' equity | 2,106,936 | 2,106,936 | 2,071,042 | ||||
Unredeemed customer loyalty program points reserve | 2,900 | 2,900 | 3,000 | ||||
Gift card liabilities | 200 | 200 | 400 | ||||
Cumulative Effect on Retained Earnings, Net of Tax | $ 600 | $ 600 | |||||
Contract Liabilities | |||||||
Unredeemed customer loyalty program points reserve | 2,900 | 2,900 | 3,000 | ||||
ASC 606 | As Previously Reported | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Other current assets | 48,083 | 48,083 | 49,892 | ||||
Total current assets | 1,049,100 | 1,049,100 | 1,017,669 | ||||
Total assets | 2,104,063 | 2,104,063 | 2,067,999 | ||||
Other current liabilities | 134,031 | 134,031 | 146,510 | ||||
Total current liabilities | 327,909 | 327,909 | 328,624 | ||||
Deferred income taxes | 138,239 | 138,239 | 84,848 | ||||
Total liabilities | 1,332,100 | 1,332,100 | 1,210,906 | ||||
Retained earnings | 797,985 | 797,985 | 885,714 | ||||
Total retained earnings | 797,985 | 797,985 | 885,714 | ||||
Total stockholders' equity | 771,963 | 771,963 | 857,093 | ||||
Total liabilities and stockholders' equity | 2,104,063 | 2,104,063 | 2,067,999 | ||||
ASC 606 | ASC 606 Adoption Adjustments | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Other current assets | 2,873 | 2,873 | 3,043 | ||||
Total current assets | 2,873 | 2,873 | 3,043 | ||||
Total assets | 2,873 | 2,873 | 3,043 | ||||
Other current liabilities | 3,083 | 3,083 | 2,624 | ||||
Total current liabilities | 3,083 | 3,083 | 2,624 | ||||
Deferred income taxes | (78) | (78) | 96 | ||||
Total liabilities | 3,005 | 3,005 | 2,720 | ||||
Retained earnings | (132) | (132) | 323 | ||||
Total retained earnings | (132) | (132) | 323 | ||||
Total stockholders' equity | (132) | (132) | 323 | ||||
Total liabilities and stockholders' equity | $ 2,873 | $ 2,873 | $ 3,043 |
BUSINESS ACQUISITIONS IN FISC_2
BUSINESS ACQUISITIONS IN FISCAL 2017 (Skip Hop Acquisition) (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | Dec. 30, 2017 | Feb. 23, 2017 |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 229,611 | $ 234,193 | $ 229,611 | $ 234,193 | $ 230,424 | $ 230,424 | ||
Acquisition-related costs | $ 0 | 800 | $ 0 | 3,300 | ||||
Skip Hop [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100.00% | |||||||
Preliminary purchase price | 142,500 | |||||||
Cash Acquired | 800 | |||||||
Goodwill | 46,000 | 46,000 | ||||||
Intangible Assets | 104,100 | 104,100 | ||||||
Tangible Assets | 53,900 | 53,900 | ||||||
Liabilities Assumed | 20,800 | 20,800 | ||||||
Deferred income tax liabilities | $ 36,300 | 36,300 | ||||||
Contingent Consideration | $ 3,600 | |||||||
Provisional Amounts [Member] | Skip Hop [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Preliminary purchase price | $ 147,300 | |||||||
Cash Acquired | $ 800 | |||||||
Goodwill | 54,200 | 54,200 | ||||||
Intangible Assets | 92,700 | 92,700 | ||||||
Tangible Assets | 54,900 | 54,900 | ||||||
Liabilities Assumed | 20,200 | 20,200 | ||||||
Deferred income tax liabilities | $ 35,900 | $ 35,900 |
BUSINESS ACQUISITIONS IN FISC_3
BUSINESS ACQUISITIONS IN FISCAL 2017 (Acquisition of Mexican Licensee) (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Aug. 01, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 229,611 | $ 230,424 | $ 234,193 | |
Mexican Licensee [Member] | ||||
Business Acquisition [Line Items] | ||||
Inventory | 8,000 | $ 8,300 | ||
Intangible Assets | 3,500 | 3,500 | ||
Goodwill | $ 6,300 | $ 6,200 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total accumulated other comprehensive loss | $ (32,318) | $ (26,496) | $ (32,318) | $ (26,496) | $ (29,093) |
Foreign currency translation adjustments | 3,213 | 4,157 | (3,225) | 8,244 | |
Cumulative Foreign Currency Translation Adjustments [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total accumulated other comprehensive loss | (24,510) | (19,380) | (24,510) | (19,380) | (21,285) |
Pension and Post-retirement Liability Adjustment [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total accumulated other comprehensive loss | $ (7,808) | $ (7,116) | (7,808) | (7,116) | (7,808) |
Tax impact | $ 4,400 | $ 4,200 | $ 4,400 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | |
Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill, Gross amount | $ 229,611,000 | $ 234,193,000 | $ 229,611,000 | $ 234,193,000 | $ 230,424,000 |
Goodwill, Net amount | 229,611,000 | 234,193,000 | 229,611,000 | 234,193,000 | 230,424,000 |
Finite intangible assets, Gross amount | 48,176,000 | 48,176,000 | |||
Finite intangible assets, Accumulated amortization | 1,554,000 | 1,554,000 | |||
Finite-Lived Intangible Assets, Net | 46,622,000 | 46,622,000 | |||
Amortization costs | 900,000 | 800,000 | 2,800,000 | 1,700,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 3,751,000 | 3,751,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 3,751,000 | 3,751,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 3,751,000 | 3,751,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 3,751,000 | 3,751,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 3,708,000 | 3,708,000 | |||
Carter's Goodwill [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill, Gross amount | 136,570,000 | 136,570,000 | 136,570,000 | 136,570,000 | 136,570,000 |
Goodwill, Net amount | 136,570,000 | 136,570,000 | 136,570,000 | 136,570,000 | 136,570,000 |
Canada Acquisition Goodwill [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill, Gross amount | 41,074,000 | 42,514,000 | 41,074,000 | 42,514,000 | 42,223,000 |
Goodwill, Net amount | 41,074,000 | 42,514,000 | 41,074,000 | 42,514,000 | 42,223,000 |
Skip Hop Goodwill [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill, Gross amount | 45,976,000 | 49,190,000 | 45,976,000 | 49,190,000 | 45,997,000 |
Goodwill, Net amount | 45,976,000 | 49,190,000 | 45,976,000 | 49,190,000 | 45,997,000 |
Carters Mexico [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill, Gross amount | 5,991,000 | 5,919,000 | 5,991,000 | 5,919,000 | 5,634,000 |
Goodwill, Net amount | 5,991,000 | 5,919,000 | 5,991,000 | 5,919,000 | 5,634,000 |
Carter's Tradename [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Indefinite intangible assets | 220,233,000 | 220,233,000 | 220,233,000 | 220,233,000 | 220,233,000 |
Oshkosh Trade Name [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Indefinite intangible assets | 85,500,000 | 85,500,000 | 85,500,000 | 85,500,000 | 85,500,000 |
Skip Hop Trade Name [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Indefinite intangible assets | 56,800,000 | 56,800,000 | 56,800,000 | 56,800,000 | 56,800,000 |
Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Accumulated amortization | 690,000 | 38,978,000 | 690,000 | 38,978,000 | 532,000 |
Intangible assets, Gross amount | 366,444,000 | 404,573,000 | 366,444,000 | 404,573,000 | 366,083,000 |
Indefinite-lived trademarks | 365,754,000 | 365,595,000 | 365,754,000 | 365,595,000 | 365,551,000 |
Other Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Gross amount | 3,911,000 | 42,040,000 | 3,911,000 | 42,040,000 | 3,550,000 |
Finite intangible assets, Accumulated amortization | 690,000 | 38,978,000 | 690,000 | 38,978,000 | 532,000 |
Finite-Lived Intangible Assets, Net | 3,221,000 | 3,062,000 | 3,221,000 | 3,062,000 | 3,018,000 |
Customer Relationships [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Gross amount | 50,589,000 | 50,589,000 | 50,435,000 | ||
Finite intangible assets, Accumulated amortization | 5,064,000 | 5,064,000 | 2,439,000 | ||
Finite-Lived Intangible Assets, Net | 45,525,000 | $ 45,525,000 | 47,996,000 | ||
Skip Hop Customer Relationships [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 15 years | ||||
Finite intangible assets, Gross amount | 47,300,000 | 44,800,000 | $ 47,300,000 | 44,800,000 | 47,300,000 |
Finite intangible assets, Accumulated amortization | 4,686,000 | 1,554,000 | 4,686,000 | 1,554,000 | 2,304,000 |
Finite-Lived Intangible Assets, Net | 42,614,000 | 43,246,000 | $ 42,614,000 | 43,246,000 | 44,996,000 |
Carters Mexico Customer Relationships [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 10 years | ||||
Finite intangible assets, Gross amount | 3,289,000 | 3,376,000 | $ 3,289,000 | 3,376,000 | 3,135,000 |
Finite intangible assets, Accumulated amortization | 378,000 | 0 | 378,000 | 0 | 135,000 |
Finite-Lived Intangible Assets, Net | $ 2,911,000 | $ 3,376,000 | $ 2,911,000 | $ 3,376,000 | $ 3,000,000 |
Minimum | Other Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 5 years | ||||
Maximum | Other Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 20 years |
COMMON STOCK (Share Repurchases
COMMON STOCK (Share Repurchases) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | ||||
Remaining capacity under authorization | $ 440,100 | $ 440,100 | ||
Number of shares repurchased (shares) | 543,793 | 596,178 | 1,364,420 | 1,727,587 |
Aggregate cost of shares repurchased | $ 56,401 | $ 52,742 | $ 145,493 | $ 150,974 |
Average price per share (USD per share) | $ 103.72 | $ 88.47 | $ 106.63 | $ 87.39 |
Dividend declared per common share (USD per share) | $ 0.45 | $ 0.37 | $ 1.35 | $ 1.11 |
LONG-TERM DEBT (Schedule of Lon
LONG-TERM DEBT (Schedule of Long Term Debt) (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 798,020 | $ 617,306 | $ 687,074 |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 400,000 | 400,000 | 400,000 |
Less unamortized issuance-related costs for senior notes | (2,980) | (3,694) | (3,926) |
Senior notes, net | 397,020 | 396,306 | 396,074 |
Secured revolving credit facility [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 401,000 | $ 221,000 | $ 291,000 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Aug. 25, 2017USD ($) | Sep. 29, 2018USD ($) | Sep. 29, 2018USD ($) | Dec. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Aug. 22, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 798,020,000 | $ 798,020,000 | $ 617,306,000 | $ 687,074,000 | ||
Outstanding letters of credit | $ 4,500,000 | $ 4,500,000 | ||||
LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percentage) | 1.375% | 1.375% | ||||
LIBOR [Member] | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.125% | |||||
LIBOR [Member] | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.875% | |||||
Base Rate [Member] | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.125% | |||||
Base Rate [Member] | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.875% | |||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 401,000,000 | $ 401,000,000 | 221,000,000 | 291,000,000 | ||
Available for future borrowing | $ 344,500,000 | $ 344,500,000 | ||||
Revolving Credit Facility [Member] | LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Description of variable rate basis | LIBOR | |||||
Revolving Credit Facility [Member] | Base Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percentage) | 0.375% | 0.375% | ||||
Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, face amount | $ 400,000,000 | $ 400,000,000 | ||||
Debt issuance costs | 2,980,000 | 2,980,000 | 3,694,000 | 3,926,000 | ||
Long-term debt | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | ||
Interest rate (as a percentage) | 5.25% | 5.25% | ||||
United States of America, Dollars | Revolving Credit Facility [Member] | LIBOR [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate (as a percentage) | 3.58% | 3.58% | ||||
Amended Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated leverage ratio | 2.25 | |||||
Amended Credit Facility [Member] | Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, face amount | $ 750,000,000 | |||||
Maximum borrowing capacity | $ 425,000,000 | |||||
Amended Credit Facility [Member] | United States Dollar Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, face amount | 650,000,000 | |||||
Maximum borrowing capacity | 350,000,000 | |||||
Amended Credit Facility [Member] | United States Dollar Credit Facility [Member] | Letters of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Short-term debt | 100,000,000 | |||||
Amended Credit Facility [Member] | United States Dollar Credit Facility [Member] | Swing Line [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Short-term debt | 70,000,000 | |||||
Amended Credit Facility [Member] | Multicurrency Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, face amount | 100,000,000 | |||||
Maximum borrowing capacity | $ 75,000,000 | |||||
Amended Credit Facility [Member] | Multicurrency Revolving Credit Facility [Member] | Letters of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Short-term debt | 40,000,000 | |||||
Amended Credit Facility [Member] | Multicurrency Revolving Credit Facility [Member] | Swing Line [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Short-term debt | $ 15,000,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,844 | $ 3,805 | $ 12,110 | $ 13,451 |
Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,148 | 983 | 3,604 | 3,182 |
Time-based restricted stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,881 | 1,706 | 5,989 | 5,668 |
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | (1,185) | 1,116 | 1,314 | 3,419 |
Allocated Share-based Compensation Expense | 2,500 | |||
Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 0 | $ 1,203 | $ 1,182 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 29, 2018 | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Gross unrecognized tax benefits | $ 15.3 | $ 15.3 | ||
Unrecognized tax benefits that if recognized would impact effective tax rate | 12.9 | 12.9 | ||
Reserves for unrecognized tax benefits | 2 | 2 | ||
Interest Expense on Uncertain Tax Positions | 0.6 | |||
Interest accrued on uncertain tax positions | $ 1.9 | $ 1.9 | $ 1 | $ 1.1 |
Effective income tax rate | 22.00% | |||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Transition Tax For Accumulated Foreign Earnings, Provisional Income Tax Expense | $ 10.4 |
FAIR VALUE MEASUREMENTS Fair _2
FAIR VALUE MEASUREMENTS Fair Value measurements (Hierarchy) (Details) - USD ($) | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Fair Value, Inputs, Level 1 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Investments | $ 17,600,000 | $ 16,700,000 | $ 15,700,000 |
Foreign exchange forward contracts | 0 | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Investments | 0 | 0 | 0 |
Foreign exchange forward contracts | 0 | 0 | 200,000 |
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Investments | 0 | 0 | 0 |
Foreign exchange forward contracts | $ 0 | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS FAIR _3
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Investments) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | ||||
Gain (Loss) on Investments | $ 0.7 | $ 0.4 | $ 0.9 | $ 1.6 |
FAIR VALUE MEASUREMENTS FAIR _4
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Contingent Consideration) (Details) $ in Millions | 12 Months Ended |
Dec. 30, 2017USD ($) | |
Skip Hop [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Contingent Consideration Credit | $ 3.6 |
FAIR VALUE MEASUREMENTS FAIR _5
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Borrowings) (Details) - USD ($) | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | $ 798,020,000 | $ 617,306,000 | $ 687,074,000 |
Secured revolving credit facility [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | 401,000,000 | 221,000,000 | 291,000,000 |
Senior Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | 400,000,000 | $ 400,000,000 | $ 400,000,000 |
Debt Instrument, face amount | 400,000,000 | ||
Fair Value [Member] | Fair Value, Inputs, Level 2 [Member] | Senior Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | $ 406,000,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Weighted-average number of common and common equivalent shares outstanding: | ||||
Basic number of common shares outstanding | 45,990,039 | 47,303,074 | 46,399,746 | 47,829,794 |
Dilutive effect of equity awards | 490,283 | 541,325 | 538,422 | 549,213 |
Diluted number of common and common equivalent shares outstanding | 46,480,322 | 47,844,399 | 46,938,168 | 48,379,007 |
Basic net income per common share (in thousands, except per share data): | ||||
Net income | $ 71,770 | $ 82,316 | $ 151,506 | $ 166,703 |
Income allocated to participating securities | (540) | (651) | (1,142) | (1,311) |
Net income available to common shareholders | $ 71,230 | $ 81,665 | $ 150,364 | $ 165,392 |
Basic net income per common share (USD per share) | $ 1.55 | $ 1.73 | $ 3.24 | $ 3.46 |
Diluted net income per common share (in thousands, except per share data): | ||||
Net income | $ 71,770 | $ 82,316 | $ 151,506 | $ 166,703 |
Income allocated to participating securities | (536) | (645) | (1,134) | (1,301) |
Net income available to common shareholders | $ 71,234 | $ 81,671 | $ 150,372 | $ 165,402 |
Diluted net income per common share (USD per share) | $ 1.53 | $ 1.71 | $ 3.20 | $ 3.42 |
Anti-dilutive shares (in shares) | 326,129 | 662,130 | 266,646 | 618,826 |
OTHER CURRENT AND LONG-TERM L_3
OTHER CURRENT AND LONG-TERM LIABILITIES (Other Current Liabilities) (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Other Liabilities Disclosure [Abstract] | |||
Accrued bonuses and incentive compensation | $ 6,286 | $ 27,566 | $ 9,328 |
Income taxes payable | 21,124 | 16,252 | 28,393 |
Accrued employee benefits | 13,987 | 21,735 | 12,503 |
Accrued and deferred rent | $ 19,137 | $ 18,213 | $ 18,160 |
OTHER CURRENT AND LONG-TERM L_4
OTHER CURRENT AND LONG-TERM LIABILITIES (Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Other Liabilities Disclosure [Abstract] | |||
Deferred lease incentives | $ 75,331 | $ 75,104 | $ 76,599 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 923,907 | $ 948,046 | $ 2,375,890 | $ 2,372,624 |
Operating Income (Loss) | $ 103,557 | $ 130,448 | $ 220,837 | $ 273,215 |
Operating income (loss) as percentage of segment net sales | 11.20% | 13.80% | 9.30% | 11.50% |
Provisions for doubtful accounts receivable from customers | $ 15,547 | $ 3,723 | ||
Direct sourcing initiative | $ 0 | $ 100 | 0 | 300 |
Acquisition-related costs | 0 | 800 | 0 | 3,300 |
Skip Hop [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Acquisition contingency fair value adjustment | 0 | 3,600 | 0 | 3,600 |
Wholesale | ||||
Segment Reporting Information [Line Items] | ||||
Provisions for doubtful accounts receivable from customers | 12,800 | |||
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Insurance Recoveries | 400 | |||
International | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | 3,500 | |||
Wholesale, Retail and International Segment [Member] | Skip Hop [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | 400 | 800 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 923,907 | $ 948,046 | $ 2,375,890 | $ 2,372,624 |
Percentage of total net sales | 100.00% | 100.00% | 100.00% | 100.00% |
Operating Segments [Member] | Wholesale | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 338,963 | $ 369,577 | $ 1,244,863 | $ 1,209,143 |
Percentage of total net sales | 36.70% | 39.00% | 52.40% | 50.90% |
Operating Income (Loss) | $ 47,139 | $ 55,519 | $ 122,086 | $ 127,441 |
Operating income (loss) as percentage of segment net sales | 10.30% | 12.20% | 9.80% | 10.50% |
Operating Segments [Member] | Retail | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 459,101 | $ 453,843 | $ 829,272 | $ 879,842 |
Percentage of total net sales | 49.70% | 47.90% | 34.90% | 37.10% |
Operating Income (Loss) | $ 67,785 | $ 78,572 | $ 148,395 | $ 184,073 |
Operating income (loss) as percentage of segment net sales | 20.00% | 21.30% | 17.90% | 20.90% |
Operating Segments [Member] | International | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 125,843 | $ 124,626 | $ 301,755 | $ 283,639 |
Percentage of total net sales | 13.60% | 13.10% | 12.70% | 12.00% |
Operating Income (Loss) | $ 12,434 | $ 16,726 | $ 20,508 | $ 28,008 |
Operating income (loss) as percentage of segment net sales | 9.90% | 13.40% | 6.80% | 9.90% |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Corporate expenses | $ (23,801) | $ (20,369) | $ (70,152) | $ (66,307) |
GUARANTOR UNAUDITED CONDENSED_3
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Balance Sheets) (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||||
Cash and cash equivalents | $ 123,898 | $ 178,494 | $ 105,370 | $ 299,358 |
Accounts receivable, net | 293,489 | 240,561 | 285,651 | |
Intercompany receivable | 0 | 0 | 0 | |
Finished goods inventories | 692,985 | 548,722 | 609,996 | |
Prepaid expenses and other current assets | 57,000 | 52,935 | 50,956 | |
Total current assets | 1,167,372 | 1,020,712 | 1,051,973 | |
Property, plant, and equipment, net of accumulated depreciation of $450,460, $404,173, and $387,041, respectively | 360,718 | 377,924 | 382,014 | |
Goodwill | 229,611 | 230,424 | 234,193 | |
Tradenames, net | 365,754 | 365,551 | 365,595 | |
Customer relationships, net | 45,525 | 47,996 | 46,622 | |
Other assets | 28,966 | 28,435 | 26,539 | |
Intercompany long-term receivable | 0 | 0 | 0 | |
Intercompany long-term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total assets | 2,197,946 | 2,071,042 | 2,106,936 | |
Current liabilities: | ||||
Accounts payable | 185,285 | 182,114 | 193,878 | |
Intercompany payables | 0 | 0 | 0 | |
Other current liabilities | 133,021 | 149,134 | 137,114 | |
Total current liabilities | 318,306 | 331,248 | 330,992 | |
Long-term debt, net | 798,020 | 617,306 | 687,074 | |
Deferred income taxes | 87,888 | 84,944 | 138,161 | |
Intercompany long-term liability | 0 | 0 | 0 | |
Intercompany long-term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 182,547 | 180,128 | 178,878 | |
Total stockholders' equity | 811,185 | 857,416 | 771,831 | |
Total liabilities and stockholders' equity | 2,197,946 | 2,071,042 | 2,106,936 | |
Consolidation, Eliminations [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | 0 | |
Intercompany receivable | (302,491) | (308,689) | (264,334) | |
Finished goods inventories | (32,819) | (20,468) | (21,829) | |
Prepaid expenses and other current assets | 0 | 0 | 0 | |
Total current assets | (335,310) | (329,157) | (286,163) | |
Property, plant, and equipment, net of accumulated depreciation of $450,460, $404,173, and $387,041, respectively | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | |
Tradenames, net | 0 | 0 | 0 | |
Customer relationships, net | 0 | 0 | 0 | |
Other assets | 0 | 0 | 0 | |
Intercompany long-term receivable | (490,514) | (441,294) | (411,787) | |
Intercompany long-term note receivable | (100,000) | (100,000) | (100,000) | |
Investment in subsidiaries | (2,212,218) | (2,142,634) | (1,959,499) | |
Total assets | (3,138,042) | (3,013,085) | (2,757,449) | |
Current liabilities: | ||||
Accounts payable | 0 | 0 | 0 | |
Intercompany payables | (302,491) | (308,689) | (264,334) | |
Other current liabilities | 0 | 0 | 0 | |
Total current liabilities | (302,491) | (308,689) | (264,334) | |
Long-term debt, net | 0 | 0 | 0 | |
Deferred income taxes | 0 | 0 | 0 | |
Intercompany long-term liability | (490,514) | (441,294) | (411,787) | |
Intercompany long-term note payable | (100,000) | (100,000) | (100,000) | |
Other long-term liabilities | 0 | 0 | 0 | |
Total stockholders' equity | (2,245,037) | (2,163,102) | (1,981,328) | |
Total liabilities and stockholders' equity | (3,138,042) | (3,013,085) | (2,757,449) | |
Parent [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | 0 | |
Intercompany receivable | 0 | 0 | 0 | |
Finished goods inventories | 0 | 0 | 0 | |
Prepaid expenses and other current assets | 0 | 0 | 0 | |
Total current assets | 0 | 0 | 0 | |
Property, plant, and equipment, net of accumulated depreciation of $450,460, $404,173, and $387,041, respectively | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | |
Tradenames, net | 0 | 0 | 0 | |
Customer relationships, net | 0 | 0 | 0 | |
Other assets | 0 | 0 | 0 | |
Intercompany long-term receivable | 0 | 0 | 0 | |
Intercompany long-term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 811,185 | 857,416 | 771,831 | |
Total assets | 811,185 | 857,416 | 771,831 | |
Current liabilities: | ||||
Accounts payable | 0 | 0 | 0 | |
Intercompany payables | 0 | 0 | 0 | |
Other current liabilities | 0 | 0 | 0 | |
Total current liabilities | 0 | 0 | 0 | |
Long-term debt, net | 0 | 0 | 0 | |
Deferred income taxes | 0 | 0 | 0 | |
Intercompany long-term liability | 0 | 0 | 0 | |
Intercompany long-term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 0 | 0 | 0 | |
Total stockholders' equity | 811,185 | 857,416 | 771,831 | |
Total liabilities and stockholders' equity | 811,185 | 857,416 | 771,831 | |
Subsidiary Issuer [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 70,518 | 129,463 | 56,715 | 229,056 |
Accounts receivable, net | 235,167 | 182,944 | 229,425 | |
Intercompany receivable | 131,518 | 87,702 | 113,950 | |
Finished goods inventories | 385,969 | 296,065 | 311,260 | |
Prepaid expenses and other current assets | 21,690 | 17,012 | 18,339 | |
Total current assets | 844,862 | 713,186 | 729,689 | |
Property, plant, and equipment, net of accumulated depreciation of $450,460, $404,173, and $387,041, respectively | 137,709 | 147,858 | 149,889 | |
Goodwill | 136,570 | 136,570 | 136,570 | |
Tradenames, net | 223,117 | 223,251 | 223,295 | |
Customer relationships, net | 0 | 0 | 0 | |
Other assets | 25,422 | 23,884 | 23,274 | |
Intercompany long-term receivable | 0 | 0 | 0 | |
Intercompany long-term note receivable | 100,000 | 100,000 | 100,000 | |
Investment in subsidiaries | 1,117,864 | 1,053,224 | 983,575 | |
Total assets | 2,585,544 | 2,397,973 | 2,346,292 | |
Current liabilities: | ||||
Accounts payable | 121,721 | 115,658 | 120,892 | |
Intercompany payables | 164,290 | 215,573 | 148,416 | |
Other current liabilities | 40,703 | 11,805 | 45,656 | |
Total current liabilities | 326,714 | 343,036 | 314,964 | |
Long-term debt, net | 798,020 | 617,306 | 687,074 | |
Deferred income taxes | 45,480 | 46,619 | 70,290 | |
Intercompany long-term liability | 490,514 | 441,294 | 411,787 | |
Intercompany long-term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 80,812 | 71,834 | 68,517 | |
Total stockholders' equity | 844,004 | 877,884 | 793,660 | |
Total liabilities and stockholders' equity | 2,585,544 | 2,397,973 | 2,346,292 | |
Guarantor Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 19,755 | 10,030 | 17,771 | 11,817 |
Accounts receivable, net | 38,986 | 40,286 | 37,165 | |
Intercompany receivable | 123,104 | 162,007 | 114,420 | |
Finished goods inventories | 261,141 | 206,556 | 245,934 | |
Prepaid expenses and other current assets | 23,431 | 21,354 | 22,342 | |
Total current assets | 466,417 | 440,233 | 437,632 | |
Property, plant, and equipment, net of accumulated depreciation of $450,460, $404,173, and $387,041, respectively | 185,203 | 189,511 | 192,065 | |
Goodwill | 45,368 | 45,368 | 48,566 | |
Tradenames, net | 142,637 | 142,300 | 142,300 | |
Customer relationships, net | 42,614 | 44,996 | 43,246 | |
Other assets | 1,690 | 2,392 | 1,533 | |
Intercompany long-term receivable | 490,514 | 441,294 | 411,787 | |
Intercompany long-term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 283,169 | 231,994 | 204,093 | |
Total assets | 1,657,612 | 1,538,088 | 1,481,222 | |
Current liabilities: | ||||
Accounts payable | 45,351 | 49,313 | 54,334 | |
Intercompany payables | 132,713 | 91,697 | 111,972 | |
Other current liabilities | 75,358 | 122,989 | 78,381 | |
Total current liabilities | 253,422 | 263,999 | 244,687 | |
Long-term debt, net | 0 | 0 | 0 | |
Deferred income taxes | 41,820 | 37,647 | 66,972 | |
Intercompany long-term liability | 0 | 0 | 0 | |
Intercompany long-term note payable | 100,000 | 100,000 | 100,000 | |
Other long-term liabilities | 88,860 | 92,570 | 95,329 | |
Total stockholders' equity | 1,173,510 | 1,043,872 | 974,234 | |
Total liabilities and stockholders' equity | 1,657,612 | 1,538,088 | 1,481,222 | |
Non-Guarantors Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 33,625 | 39,001 | 30,884 | $ 58,485 |
Accounts receivable, net | 19,336 | 17,331 | 19,061 | |
Intercompany receivable | 47,869 | 58,980 | 35,964 | |
Finished goods inventories | 78,694 | 66,569 | 74,631 | |
Prepaid expenses and other current assets | 11,879 | 14,569 | 10,275 | |
Total current assets | 191,403 | 196,450 | 170,815 | |
Property, plant, and equipment, net of accumulated depreciation of $450,460, $404,173, and $387,041, respectively | 37,806 | 40,555 | 40,060 | |
Goodwill | 47,673 | 48,486 | 49,057 | |
Tradenames, net | 0 | 0 | 0 | |
Customer relationships, net | 2,911 | 3,000 | 3,376 | |
Other assets | 1,854 | 2,159 | 1,732 | |
Intercompany long-term receivable | 0 | 0 | 0 | |
Intercompany long-term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total assets | 281,647 | 290,650 | 265,040 | |
Current liabilities: | ||||
Accounts payable | 18,213 | 17,143 | 18,652 | |
Intercompany payables | 5,488 | 1,419 | 3,946 | |
Other current liabilities | 16,960 | 14,340 | 13,077 | |
Total current liabilities | 40,661 | 32,902 | 35,675 | |
Long-term debt, net | 0 | 0 | 0 | |
Deferred income taxes | 588 | 678 | 899 | |
Intercompany long-term liability | 0 | 0 | 0 | |
Intercompany long-term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 12,875 | 15,724 | 15,032 | |
Total stockholders' equity | 227,523 | 241,346 | 213,434 | |
Total liabilities and stockholders' equity | $ 281,647 | $ 290,650 | $ 265,040 |
GUARANTOR UNAUDITED CONDENSED_4
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | $ 923,907 | $ 948,046 | $ 2,375,890 | $ 2,372,624 |
Cost of goods sold | 536,457 | 544,468 | 1,346,005 | 1,350,107 |
Gross profit | 387,450 | 403,578 | 1,029,885 | 1,022,517 |
Selling, general, and administrative expenses | 294,117 | 283,480 | 837,621 | 781,420 |
Royalty income, net | 10,224 | 10,350 | 28,573 | 32,118 |
Operating income | 103,557 | 130,448 | 220,837 | 273,215 |
Interest expense | 9,868 | 8,061 | 25,790 | 22,359 |
Interest income | (84) | (41) | (474) | (259) |
(Income) loss in subsidiaries | 0 | 0 | 0 | 0 |
Other expense (income), net | (66) | (815) | 528 | (1,580) |
Income before income taxes | 93,839 | 123,243 | 194,993 | 252,695 |
Provision for income taxes | 22,069 | 40,927 | 43,487 | 85,992 |
Net income | 71,770 | 82,316 | 151,506 | 166,703 |
Consolidation, Eliminations [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | (272,276) | (251,353) | (678,357) | (596,827) |
Cost of goods sold | (258,262) | (236,323) | (650,965) | (582,782) |
Gross profit | (14,014) | (15,030) | (27,392) | (14,045) |
Selling, general, and administrative expenses | (7,815) | (8,767) | (24,250) | (25,986) |
Royalty income, net | (3,611) | (3,396) | (9,209) | (7,970) |
Operating income | (9,810) | (9,659) | (12,351) | 3,971 |
Interest expense | (1,327) | (1,327) | (3,981) | (3,981) |
Interest income | 1,327 | 1,327 | 3,981 | 3,981 |
(Income) loss in subsidiaries | 99,824 | 97,908 | 181,945 | 158,399 |
Other expense (income), net | 0 | 0 | 0 | 0 |
Income before income taxes | (109,634) | (107,567) | (194,296) | (154,428) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income | (109,634) | (107,567) | (194,296) | (154,428) |
Parent [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Cost of goods sold | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Selling, general, and administrative expenses | 0 | 0 | 0 | 0 |
Royalty income, net | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Interest income | 0 | 0 | 0 | 0 |
(Income) loss in subsidiaries | (71,770) | (82,316) | (151,506) | (166,703) |
Other expense (income), net | 0 | 0 | 0 | 0 |
Income before income taxes | 71,770 | 82,316 | 151,506 | 166,703 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income | 71,770 | 82,316 | 151,506 | 166,703 |
Subsidiary Issuer [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 570,007 | 587,022 | 1,376,806 | 1,393,351 |
Cost of goods sold | 424,895 | 423,433 | 1,028,751 | 1,014,968 |
Gross profit | 145,112 | 163,589 | 348,055 | 378,383 |
Selling, general, and administrative expenses | 53,008 | 49,368 | 137,246 | 128,595 |
Royalty income, net | 8,515 | 8,245 | 24,043 | 25,580 |
Operating income | 100,619 | 122,466 | 234,852 | 275,368 |
Interest expense | 9,866 | 8,013 | 25,778 | 22,124 |
Interest income | (1,329) | (1,330) | (3,999) | (4,169) |
(Income) loss in subsidiaries | (6,446) | (4,555) | 14,593 | 23,699 |
Other expense (income), net | 0 | (120) | 19 | (745) |
Income before income taxes | 98,528 | 120,458 | 198,461 | 234,459 |
Provision for income taxes | 16,948 | 28,483 | 34,604 | 71,727 |
Net income | 81,580 | 91,975 | 163,857 | 162,732 |
Guarantor Subsidiaries [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 506,994 | 506,272 | 1,379,293 | 1,337,078 |
Cost of goods sold | 309,123 | 297,858 | 820,721 | 783,973 |
Gross profit | 197,871 | 208,414 | 558,572 | 553,105 |
Selling, general, and administrative expenses | 214,036 | 210,175 | 626,125 | 593,544 |
Royalty income, net | 5,320 | 5,501 | 13,739 | 14,508 |
Operating income | (10,845) | 3,740 | (53,814) | (25,931) |
Interest expense | 1,329 | 1,375 | 3,983 | 4,121 |
Interest income | (2) | 0 | (2) | 0 |
(Income) loss in subsidiaries | (21,608) | (11,037) | (45,032) | (15,395) |
Other expense (income), net | 235 | 123 | 360 | 771 |
Income before income taxes | 9,201 | 13,279 | (13,123) | (15,428) |
Provision for income taxes | 2,755 | 8,724 | 1,470 | 8,271 |
Net income | 6,446 | 4,555 | (14,593) | (23,699) |
Non-Guarantors Subsidiaries [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 119,182 | 106,105 | 298,148 | 239,022 |
Cost of goods sold | 60,701 | 59,500 | 147,498 | 133,948 |
Gross profit | 58,481 | 46,605 | 150,650 | 105,074 |
Selling, general, and administrative expenses | 34,888 | 32,704 | 98,500 | 85,267 |
Royalty income, net | 0 | 0 | 0 | 0 |
Operating income | 23,593 | 13,901 | 52,150 | 19,807 |
Interest expense | 0 | 0 | 10 | 95 |
Interest income | (80) | (38) | (454) | (71) |
(Income) loss in subsidiaries | 0 | 0 | 0 | 0 |
Other expense (income), net | (301) | (818) | 149 | (1,606) |
Income before income taxes | 23,974 | 14,757 | 52,445 | 21,389 |
Provision for income taxes | 2,366 | 3,720 | 7,413 | 5,994 |
Net income | $ 21,608 | $ 11,037 | $ 45,032 | $ 15,395 |
GUARANTOR UNAUDITED CONDENSED_5
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | $ 71,770 | $ 82,316 | $ 151,506 | $ 166,703 |
Foreign currency translation adjustments | 3,213 | 4,157 | (3,225) | 8,244 |
Comprehensive income | 74,983 | 86,473 | 148,281 | 174,947 |
Consolidation, Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (109,634) | (107,567) | (194,296) | (154,428) |
Foreign currency translation adjustments | (9,639) | (12,471) | 9,675 | (24,732) |
Comprehensive income | (119,273) | (120,038) | (184,621) | (179,160) |
Parent [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 71,770 | 82,316 | 151,506 | 166,703 |
Foreign currency translation adjustments | 3,213 | 4,157 | (3,225) | 8,244 |
Comprehensive income | 74,983 | 86,473 | 148,281 | 174,947 |
Subsidiary Issuer [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 81,580 | 91,975 | 163,857 | 162,732 |
Foreign currency translation adjustments | 3,213 | 4,157 | (3,225) | 8,244 |
Comprehensive income | 84,793 | 96,132 | 160,632 | 170,976 |
Guarantor Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 6,446 | 4,555 | (14,593) | (23,699) |
Foreign currency translation adjustments | 3,213 | 4,157 | (3,225) | 8,244 |
Comprehensive income | 9,659 | 8,712 | (17,818) | (15,455) |
Non-Guarantors Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 21,608 | 11,037 | 45,032 | 15,395 |
Foreign currency translation adjustments | 3,213 | 4,157 | (3,225) | 8,244 |
Comprehensive income | $ 24,821 | $ 15,194 | $ 41,807 | $ 23,639 |
GUARANTOR UNAUDITED CONDENSED_6
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Cash Flows) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 29, 2018 | Sep. 30, 2017 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | $ 21,358 | $ 117,506 |
Cash flows from investing activities: | ||
Capital expenditures | (47,844) | (51,656) |
Intercompany investing activity | 0 | 0 |
Acquisitions of businesses, net of cash acquired | 96 | |
Disposals and recoveries from property, plant, and equipment | 376 | 0 |
Acquisition of business, net of cash acquired | (159,365) | |
Net cash used in investing activities | (47,372) | (211,021) |
Cash flows from financing activities: | ||
Intercompany financing activity | 0 | 0 |
Payment of debt issuance costs | (890) | (2,138) |
Borrowings under secured revolving credit facility | 290,000 | 200,000 |
Payments on secured revolving credit facility | (110,000) | (93,965) |
Dividends paid | (63,114) | (53,443) |
Repurchases of common stock | (145,493) | (150,974) |
Withholdings from vestings of restricted stock | (6,747) | (5,654) |
Proceeds from exercises of stock options | 8,732 | 5,140 |
Net cash used in financing activities | (27,512) | (101,034) |
Effect of exchange rate changes on cash and cash equivalents | (1,070) | 561 |
Net increase (decrease) in cash and cash equivalents | (54,596) | (193,988) |
Cash and cash equivalents, beginning of period | 178,494 | 299,358 |
Cash and cash equivalents, end of period | 123,898 | 105,370 |
Consolidation, Eliminations [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Intercompany investing activity | (208,607) | (204,421) |
Acquisitions of businesses, net of cash acquired | 0 | |
Disposals and recoveries from property, plant, and equipment | 0 | |
Acquisition of business, net of cash acquired | 0 | |
Net cash used in investing activities | (208,607) | (204,421) |
Cash flows from financing activities: | ||
Intercompany financing activity | 208,607 | 204,421 |
Payment of debt issuance costs | 0 | |
Borrowings under secured revolving credit facility | 0 | 0 |
Payments on secured revolving credit facility | 0 | 0 |
Dividends paid | 0 | 0 |
Repurchases of common stock | 0 | 0 |
Withholdings from vestings of restricted stock | 0 | 0 |
Proceeds from exercises of stock options | 0 | 0 |
Net cash used in financing activities | 208,607 | 204,421 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | 0 | 0 |
Parent [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Intercompany investing activity | 206,622 | 204,931 |
Acquisitions of businesses, net of cash acquired | 0 | |
Disposals and recoveries from property, plant, and equipment | 0 | |
Acquisition of business, net of cash acquired | 0 | |
Net cash used in investing activities | 206,622 | 204,931 |
Cash flows from financing activities: | ||
Intercompany financing activity | 0 | 0 |
Payment of debt issuance costs | 0 | 0 |
Borrowings under secured revolving credit facility | 0 | 0 |
Payments on secured revolving credit facility | 0 | 0 |
Dividends paid | (63,114) | (53,443) |
Repurchases of common stock | (145,493) | (150,974) |
Withholdings from vestings of restricted stock | (6,747) | (5,654) |
Proceeds from exercises of stock options | 8,732 | 5,140 |
Net cash used in financing activities | (206,622) | (204,931) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | 0 | 0 |
Subsidiary Issuer [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | (11,296) | 53,299 |
Cash flows from investing activities: | ||
Capital expenditures | (13,121) | (16,678) |
Intercompany investing activity | (2,116) | (510) |
Acquisitions of businesses, net of cash acquired | 0 | |
Disposals and recoveries from property, plant, and equipment | 0 | |
Acquisition of business, net of cash acquired | (144,520) | |
Net cash used in investing activities | (15,237) | (161,708) |
Cash flows from financing activities: | ||
Intercompany financing activity | (211,522) | (186,794) |
Payment of debt issuance costs | (890) | (2,138) |
Borrowings under secured revolving credit facility | 290,000 | 200,000 |
Payments on secured revolving credit facility | (110,000) | (75,000) |
Dividends paid | 0 | 0 |
Repurchases of common stock | 0 | 0 |
Withholdings from vestings of restricted stock | 0 | 0 |
Proceeds from exercises of stock options | 0 | 0 |
Net cash used in financing activities | (32,412) | (63,932) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | (58,945) | (172,341) |
Cash and cash equivalents, beginning of period | 129,463 | 229,056 |
Cash and cash equivalents, end of period | 70,518 | 56,715 |
Guarantor Subsidiaries [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | (16,349) | 54,934 |
Cash flows from investing activities: | ||
Capital expenditures | (30,056) | (28,867) |
Intercompany investing activity | 3,024 | 0 |
Acquisitions of businesses, net of cash acquired | 0 | |
Disposals and recoveries from property, plant, and equipment | 369 | |
Acquisition of business, net of cash acquired | 746 | |
Net cash used in investing activities | (26,663) | (28,121) |
Cash flows from financing activities: | ||
Intercompany financing activity | (12,263) | (20,859) |
Payment of debt issuance costs | 0 | |
Borrowings under secured revolving credit facility | 0 | 0 |
Payments on secured revolving credit facility | 0 | 0 |
Dividends paid | 65,000 | 0 |
Repurchases of common stock | 0 | 0 |
Withholdings from vestings of restricted stock | 0 | 0 |
Proceeds from exercises of stock options | 0 | 0 |
Net cash used in financing activities | 52,737 | (20,859) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 9,725 | 5,954 |
Cash and cash equivalents, beginning of period | 10,030 | 11,817 |
Cash and cash equivalents, end of period | 19,755 | 17,771 |
Non-Guarantors Subsidiaries [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 49,003 | 9,273 |
Cash flows from investing activities: | ||
Capital expenditures | (4,667) | (6,111) |
Intercompany investing activity | 1,077 | 0 |
Acquisitions of businesses, net of cash acquired | 96 | |
Disposals and recoveries from property, plant, and equipment | 7 | |
Acquisition of business, net of cash acquired | (15,591) | |
Net cash used in investing activities | (3,487) | (21,702) |
Cash flows from financing activities: | ||
Intercompany financing activity | 15,178 | 3,232 |
Payment of debt issuance costs | 0 | |
Borrowings under secured revolving credit facility | 0 | 0 |
Payments on secured revolving credit facility | 0 | (18,965) |
Dividends paid | (65,000) | 0 |
Repurchases of common stock | 0 | 0 |
Withholdings from vestings of restricted stock | 0 | 0 |
Proceeds from exercises of stock options | 0 | 0 |
Net cash used in financing activities | (49,822) | (15,733) |
Effect of exchange rate changes on cash and cash equivalents | (1,070) | 561 |
Net increase (decrease) in cash and cash equivalents | (5,376) | (27,601) |
Cash and cash equivalents, beginning of period | 39,001 | 58,485 |
Cash and cash equivalents, end of period | $ 33,625 | $ 30,884 |