DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Apr. 03, 2021 | Apr. 23, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 3, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-31829 | |
Entity Registrant Name | CARTER’S, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3912933 | |
Entity Address, Address Line One | Phipps Tower | |
Entity Address, Address Line Two | 3438 Peachtree Road NE | |
Entity Address, Address Line Three | Suite 1800 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30326 | |
City Area Code | 678 | |
Local Phone Number | 791-1000 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | CRI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 43,956,877 | |
Entity Central Index Key | 0001060822 | |
Current Fiscal Year End Date | --01-01 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Current assets: | |||
Cash and cash equivalents, end of period | $ 1,053,690 | $ 1,102,323 | $ 759,100 |
Accounts receivable, net | 240,212 | 186,512 | 221,884 |
Inventory, Net | 560,683 | 599,262 | 565,932 |
Prepaid expenses and other current assets | 63,290 | 57,927 | 43,349 |
Total current assets | 1,917,875 | 1,946,024 | 1,590,265 |
Property, Plant and Equipment, Net | 248,799 | 262,345 | 303,919 |
Operating lease assets | 559,391 | 593,008 | 673,301 |
Tradenames, net | 307,830 | 307,893 | 308,080 |
Goodwill | 212,271 | 211,776 | 207,720 |
Customer relationships, net | 36,596 | 37,510 | 39,785 |
Other assets | 27,711 | 34,024 | 30,435 |
Total assets | 3,310,473 | 3,392,580 | 3,153,505 |
Current liabilities: | |||
Accounts payable | 334,831 | 472,140 | 187,199 |
Current operating lease liabilities | 172,117 | 185,152 | 161,341 |
Other current liabilities | 149,911 | 135,240 | 79,135 |
Total current liabilities | 656,859 | 792,532 | 427,675 |
Long-term debt, net | 989,980 | 989,530 | 1,238,822 |
Deferred income taxes | 56,990 | 52,770 | 65,260 |
Long-term operating lease liabilities | 517,875 | 554,497 | 647,334 |
Other long-term liabilities | 59,160 | 65,218 | 58,412 |
Total liabilities | 2,280,864 | 2,454,547 | 2,437,503 |
Commitments and contingencies - Note 14 | |||
Stockholders’ equity: | |||
Preferred stock; par value $0.01 per share;100,000 shares authorized; none issued or outstanding at April 3, 2021, January 2, 2021, and March 28, 2020 | 0 | 0 | 0 |
Common stock, voting; par value $0.01 per share; 150,000,000 shares authorized; 43,947,659, 43,780,075 and 43,610,725 shares issued and outstanding at April 3, 2021, January 2, 2021, and March 28, 2020, respectively | 440 | 438 | 436 |
Additional paid-in capital | 21,904 | 17,752 | 0 |
Accumulated other comprehensive loss | (31,534) | (32,760) | (48,626) |
Retained earnings | 1,038,799 | 952,603 | 764,192 |
Stockholders' Equity Attributable to Parent, Total | 1,029,609 | 938,033 | 716,002 |
Liabilities and Equity, Total | $ 3,310,473 | $ 3,392,580 | $ 3,153,505 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Statement of Financial Position [Abstract] | |||
Allowance for credit losses | $ 6,695 | $ 5,940 | $ 10,620 |
Inventory valuation reserves | 15,581 | 14,206 | 35,597 |
Accumulated depreciation of property, plant, and equipment | $ 557,608 | $ 583,980 | $ 542,158 |
Preferred stock par value (in USD per share) | $ 0.01 | ||
Preferred stock shares authorized (in shares) | 100,000 | ||
Preferred stock shares issued and outstanding (in shares) | 0 | ||
Common stock par value (in USD per share) | $ 0.01 | ||
Common stock shares authorized (in shares) | 150,000,000 | ||
Common stock shares issued and outstanding (in shares) | 43,947,659 | 43,780,075 | 43,610,725 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Net sales | $ 787,361 | $ 654,473 |
Cost of goods sold | 401,731 | 403,373 |
Adverse purchase commitments (inventory and raw materials), net | (6,330) | 22,837 |
Gross profit | 391,960 | 228,263 |
Selling, general, and administrative expenses | 271,927 | 269,837 |
Goodwill impairment | 0 | 17,742 |
Intangible asset impairment | 0 | 26,500 |
Operating income (loss) | 127,496 | (78,478) |
Interest expense | 15,348 | 8,864 |
Interest income | (225) | (464) |
Other (income) expense, net | (917) | 4,818 |
Income (loss) before income taxes | 113,290 | (91,696) |
Income tax provision (benefit) | 27,094 | (13,002) |
Net income (loss) | $ 86,196 | $ (78,694) |
Basic net income (loss) per common share (in USD per share) | $ 1.96 | $ (1.82) |
Diluted net income (loss) per common share (in USD per share) | 1.96 | (1.82) |
Dividend declared and paid per common share (in USD per share) | $ 0 | $ 0.60 |
Royalty | ||
Net sales | $ 7,463 | $ 7,338 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 86,196 | $ (78,694) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 1,226 | (12,992) |
Comprehensive income (loss) | $ 87,422 | $ (91,686) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings |
Balance at beginning of period (in shares) at Dec. 28, 2019 | 43,963,103 | ||||
Balance at beginning of period at Dec. 28, 2019 | $ 880,130 | $ 440 | $ 0 | $ (35,634) | $ 915,324 |
Exercise of stock options (in shares) | 33,158 | ||||
Exercise of stock options | 1,840 | $ 0 | 1,840 | 0 | 0 |
Withholdings from vesting of restricted stock (in shares) | (43,611) | ||||
Withholdings from vesting of restricted stock | (4,712) | $ 0 | (4,712) | 0 | 0 |
Restricted stock activity (in shares) | 132,759 | ||||
Restricted stock activity | 0 | $ 1 | (1) | 0 | 0 |
Stock-based compensation expense | 1,945 | $ 0 | 1,945 | 0 | 0 |
Repurchase of common stock (in shares) | (474,684) | ||||
Repurchase of common stock | (45,255) | $ (5) | 928 | 0 | (46,178) |
Cash dividends declared and paid | (26,260) | 0 | 0 | 0 | (26,260) |
Comprehensive loss | (91,686) | $ 0 | 0 | (12,992) | |
Net income (loss) | $ (78,694) | (78,694) | |||
Balance at end of period (in shares) at Mar. 28, 2020 | 43,610,725 | 43,610,725 | |||
Balance at end of period at Mar. 28, 2020 | $ 716,002 | $ 436 | 0 | (48,626) | 764,192 |
Balance at beginning of period (in shares) at Jan. 02, 2021 | 43,780,075 | 43,780,075 | |||
Balance at beginning of period at Jan. 02, 2021 | $ 938,033 | $ 438 | 17,752 | (32,760) | 952,603 |
Exercise of stock options (in shares) | 12,065 | ||||
Exercise of stock options | 811 | $ 0 | 811 | 0 | 0 |
Withholdings from vesting of restricted stock (in shares) | (37,444) | ||||
Withholdings from vesting of restricted stock | (3,588) | $ 0 | (3,588) | 0 | 0 |
Restricted stock activity (in shares) | 192,963 | ||||
Restricted stock activity | 0 | $ 2 | (2) | 0 | 0 |
Stock-based compensation expense | 6,931 | 0 | 6,931 | 0 | 0 |
Comprehensive loss | 87,422 | $ 0 | 0 | 1,226 | |
Net income (loss) | $ 86,196 | 86,196 | |||
Balance at end of period (in shares) at Apr. 03, 2021 | 43,947,659 | 43,947,659 | |||
Balance at end of period at Apr. 03, 2021 | $ 1,029,609 | $ 440 | $ 21,904 | $ (31,534) | $ 1,038,799 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Statement of Cash Flows [Abstract] | ||
Net income (loss) | $ 86,196 | $ (78,694) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation of property, plant, and equipment | 23,183 | 22,433 |
Amortization of intangible assets | 932 | 935 |
Provisions for excess and obsolete inventory, net | 1,364 | 26,596 |
Goodwill impairment | 0 | 17,742 |
Intangible asset impairment | 0 | 26,500 |
Other asset impairments and (gain) loss on disposal of property, plant and equipment, net of recoveries | (25) | 2,050 |
Amortization of debt issuance costs | 738 | 353 |
Stock-based compensation expense | 6,931 | 1,945 |
Unrealized foreign currency exchange loss, net | 49 | 3,856 |
Provisions for doubtful accounts receivable from customers | 766 | 4,270 |
Deferred income tax (benefit) | 4,365 | (10,053) |
Effect of changes in operating assets and liabilities: | ||
Accounts receivable | 54,484 | (22,926) |
Finished goods inventories | 37,812 | (5,634) |
Prepaid expenses and other assets | (5,186) | 7,254 |
Accounts payable and other liabilities | (142,171) | (56,781) |
Net cash used in operating activities | (39,530) | (14,302) |
Cash flows from investing activities: | ||
Capital expenditures | 11,665 | 8,068 |
Proceeds from sale of investments | 5,000 | 0 |
Net cash used in investing activities | (6,665) | (8,068) |
Cash flows from financing activities: | ||
Borrowings under secured revolving credit facility | 0 | 644,000 |
Repurchases of common stock | 0 | (45,255) |
Dividends paid | 0 | (26,260) |
Withholdings from vesting of restricted stock | (3,588) | (4,712) |
Proceeds from exercises of stock options | 811 | 1,840 |
Net cash (used in) provided by financing activities | (2,777) | 569,613 |
Net effect of exchange rate changes on cash and cash equivalents | 339 | (2,454) |
Net (decrease) increase in cash and cash equivalents | (48,633) | 544,789 |
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 1,102,323 | 214,311 |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | $ 1,053,690 | $ 759,100 |
THE COMPANY
THE COMPANY | 3 Months Ended |
Apr. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | THE COMPANY Carter’s, Inc. and its wholly owned subsidiaries (collectively, the “Company”) design, source, and market branded childrenswear under the Carter’s, OshKosh, Skip Hop, Child of Mine, Just One You, Simple Joys, Carter’s little baby basics , little planet , 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. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Apr. 03, 2021 | |
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 (loss), 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 ended April 3, 2021 are not necessarily indicative of the results that may be expected for the current fiscal year ending January 1, 2022. 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 January 2, 2021 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. Revision of Previously Issued Financial Statements During the second quarter of fiscal year 2020, it was determined that there were amounts presented incorrectly in the statement of cash flows for the annual and interim year to date periods subsequent to the December 30, 2018 adoption of ASC 842, Leases , due to the presentation of the non-cash impact of the initial and subsequent recognition of the Right of Use (“ROU”) assets and lease liabilities within the “Prepaid expenses and other assets” and “Accounts payable and other liabilities” line items, respectively, within operating cash flows. This incorrect presentation had no impact on net cash (used in) provided by operating activities for any of the periods. We assessed the materiality of the incorrect presentation and concluded that the previously issued financial statements were not materially misstated. The presentation errors resulted in an offsetting overstatement of cash used for prepaid expenses and other assets and cash provided by accounts payable and other liabilities of $29 million for the three months ended March 28, 2020. The accompanying consolidated statement of cash flows appropriately reflect the corrected presentation of these non-cash activities. In addition, the Company has reclassified prior comparable period amounts to present ROU asset amortization and lease liability payment activity on a net basis within the “Accounts payable and other liabilities” line item. The revisions to the three months ended March 31, 2020 have been presented in this Form 10-Q. We will continue to provide supplemental noncash cash flow disclosure information in the notes to the financial statements. COVID-19 The Company is closely monitoring the effects of the ongoing coronavirus (“COVID-19”) pandemic and its impact on our business. Additionally, the Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts of COVID-19 as of April 3, 2021 and through the date of this report filing. The accounting matters assessed included, but were not limited to, our allowance for credit losses, inventory reserves, adverse inventory and fabric purchase commitments, stock based compensation, and the carrying value of our goodwill and other long-lived assets. Based on these assessments, in the first quarter of fiscal 2021, the Company recorded a benefit in fabric purchase commitment charges of $6.3 million related to better than expected sales of inventory and utilization of fabric that were reserved for in the first quarter of fiscal 2020 due to COVID-19 related disruptions. As of April 3, 2021, the Company had an outstanding reserve of $6.3 million for adverse inventory and fabric purchase commitments. Additional COVID-19 related charges in the first quarter of fiscal 2021 were $2.1 million and were primarily related to the costs associated with additional protective equipment and cleaning supplies. 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. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Apr. 03, 2021 | |
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. 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 certain of its licensees. Disaggregated revenues from these sources for the first quarter of fiscal 2021 and 2020 were as follows: Fiscal quarter ended April 3, 2021 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 283,377 $ 42,792 $ 326,169 Direct-to-consumer 407,067 — 54,125 461,192 $ 407,067 $ 283,377 $ 96,917 $ 787,361 Royalty income $ 3,070 $ 3,775 $ 618 $ 7,463 Fiscal quarter ended March 28, 2020 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 252,130 $ 38,730 $ 290,860 Direct-to-consumer 320,717 — 42,896 363,613 $ 320,717 $ 252,130 $ 81,626 $ 654,473 Royalty income $ 2,494 $ 4,083 $ 761 $ 7,338 Accounts Receivable from Customers and Licensees The components of Accounts receivable, net, were as follows: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 Trade receivables from wholesale customers, net (1) $ 234,643 $ 180,830 $ 219,140 Royalties receivable 7,090 5,733 6,428 Tenant allowances and other receivables 11,664 12,315 11,968 Total gross receivables $ 253,397 $ 198,878 $ 237,536 Less: Wholesale accounts receivable reserves (1)(2) (13,185) (12,366) (15,652) Accounts receivable, net $ 240,212 $ 186,512 $ 221,884 (1) The Company reclassified $2.0 million of customer support related items from Wholesale accounts receivable reserves into Trade receivables from wholesale customers, net for the period ended March 28, 2020. (2) Includes allowance for credit losses of $6.7 million, $5.9 million, and $10.6 million for the periods ended April 3, 2021, January 2, 2021, and March 28, 2020, respectively. 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 a customer and has a future obligation to transfer goods to the customer. Total contract liabilities consisted of the following amounts: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 Contract liabilities - current: Unredeemed gift cards $ 17,426 $ 18,300 $ 16,758 Unredeemed customer loyalty rewards 5,893 5,241 4,503 Carter’s credit card - upfront bonus (1) 714 714 714 Total contract liabilities - current (2) $ 24,033 $ 24,255 $ 21,975 Contract liabilities - non-current $ 2,679 $ 2,857 $ 3,393 Total contract liabilities $ 26,712 $ 27,112 $ 25,368 (1) Carter’s credit card - upfront bonus - the Company received an upfront signing bonus from a third-party financial institution, which will be recognized as revenue on a straight-line basis over the term of the agreement. This amount reflects the current portion of this bonus to be recognized as revenue over the next twelve months. (2) Included with Other current liabilities on the Company's consolidated balance sheet. |
LEASES
LEASES | 3 Months Ended |
Apr. 03, 2021 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. The Company’s leases generally have initial terms ranging from 1 year to 10 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to early terminate the lease. As of April 3, 2021, the Company’s finance leases were not material to the consolidated balance sheets, consolidated statements of operations, or statements of cash flows. The following components of lease expense are included in Selling, general and administrative expenses on the Company’s consolidated statements of operations for the first quarter of fiscal 2021 and 2020: Fiscal quarter ended (dollars in thousands) April 3, 2021 March 28, 2020 Operating lease cost $ 42,698 $ 46,423 Variable lease cost (*) 16,398 16,285 Net lease cost $ 59,096 $ 62,708 (*) Includes short-term leases, which are not material. Supplemental balance sheet information related to leases was as follows: Fiscal quarter ended April 3, 2021 March 28, 2020 Weighted average remaining operating lease term (years) 5.3 5.9 Weighted average discount rate for operating leases 3.29% 4.29% Cash paid for amounts included in the measurement of operating lease liabilities in the first quarter of fiscal 2021 and 2020 were $57.9 million and $50.2 million, respectively. Non-cash transactions to recognize operating assets and liabilities for new leases in the first quarter of fiscal 2021 and 2020 were $3.3 million and $29.4 million, respectively. As of April 3, 2021, the maturities of lease liabilities were as follows: (dollars in thousands) Operating leases Remainder of 2021 $ 149,606 2022 159,141 2023 130,852 2024 104,942 2025 76,530 2026 54,094 After 2026 77,693 Total lease payments $ 752,858 Less: Interest (62,866) Present value of lease liabilities (*) $ 689,992 (*) As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We used the incremental borrowing rate on December 30, 2018, for operating leases that commenced prior to that date. As of April 3, 2021, the minimum rental commitments for additional operating lease contracts that have not yet commenced, primarily for retail stores, are $6.9 million. These operating leases will commence between fiscal year 2021 and fiscal year 2023 with lease terms of 7 years to 9 years. |
ACUMULATED OTHER COMPREHENSIVE
ACUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Apr. 03, 2021 | |
Text Block [Abstract] | |
ACUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The components of Accumulated other comprehensive loss consisted of the following: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 Cumulative foreign currency translation adjustments $ (20,081) $ (21,307) $ (39,514) Pension and post-retirement obligations (*) (11,453) (11,453) (9,112) Total accumulated other comprehensive loss $ (31,534) $ (32,760) $ (48,626) (*) Net of income taxes of $3.5 million, $3.5 million, and $2.8 million, for the periods ended April 3, 2021, January 2, 2021, and March 28, 2020, respectively. During the first quarter of both fiscal 2021 and fiscal 2020, no amounts were reclassified from Accumulated other comprehensive loss to the statement of operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Apr. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The balances and changes in the carrying amount of goodwill attributable to each segment were as follows: (dollars in thousands) U.S. Retail U.S. Wholesale International Total Balance at December 28, 2019 $ 83,934 $ 74,454 $ 70,638 $ 229,026 Goodwill impairment (1) — — (17,742) (17,742) Foreign currency impact — — (3,564) (3,564) Balance at March 28, 2020 (2) $ 83,934 $ 74,454 $ 49,332 $ 207,720 Balance at January 2, 2021 (2) $ 83,934 $ 74,454 $ 53,388 $ 211,776 Foreign currency impact — — 495 495 Balance at April 3, 2021 (2) $ 83,934 $ 74,454 $ 53,883 $ 212,271 (1) In the first quarter of fiscal 2020, a charge of $17.7 million was recorded to reflect the impairment of the value ascribed to the goodwill in the Other International reporting unit in the International segment. (2) Goodwill balance for the International reporting unit is net of accumulated impairment losses of $17.7 million. A summary of the carrying value of the Company’s intangible assets were as follows: April 3, 2021 January 2, 2021 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Gross amount Accumulated amortization Net amount Carter’s tradename Indefinite $ 220,233 $ — $ 220,233 $ 220,233 $ — $ 220,233 OshKosh tradename Indefinite 70,000 — 70,000 70,000 — 70,000 Skip Hop tradename Indefinite 15,000 — 15,000 15,000 — 15,000 Finite-life tradenames 5 -20 years 3,911 1,314 2,597 3,911 1,251 2,660 Total tradenames, net $ 309,144 $ 1,314 $ 307,830 $ 309,144 $ 1,251 $ 307,893 Skip Hop customer relationships 15 years $ 47,300 $ 12,628 $ 34,672 $ 47,300 $ 11,834 $ 35,466 Carter’s Mexico customer relationships 10 years 3,063 1,139 1,924 3,108 1,064 2,044 Total customer relationships, net $ 50,363 $ 13,767 $ 36,596 $ 50,408 $ 12,898 $ 37,510 March 28, 2020 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Carter’s tradename Indefinite $ 220,233 $ — $ 220,233 OshKosh tradename (1) Indefinite 70,000 — 70,000 Skip Hop tradename (2) Indefinite 15,000 — 15,000 Finite-life tradenames 5 - 20 years 3,911 1,064 2,847 Total tradenames, net $ 309,144 $ 1,064 $ 308,080 Skip Hop customer relationships 15 years $ 47,300 $ 9,451 $ 37,849 Carter’s Mexico customer relationships 10 years 2,790 854 1,936 Total customer relationships, net $ 50,090 $ 10,305 $ 39,785 (1) In the first quarter of fiscal 2020, a charge of $13.6 million, $1.6 million, and $0.3 million was recorded on our indefinite-lived OshKosh tradename asset in the U.S. Retail, U.S. Wholesale, and International segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived OshKosh tradename asset. (2) In the first quarter of fiscal 2020, a charge of $6.8 million, $3.7 million, and $0.5 million was recorded on our indefinite-lived Skip Hop tradename asset in the U.S. Wholesale, International, and U.S. Retail segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived Skip Hop tradename asset. Amortization expense for intangible assets subject to amortization was approximately $0.9 million for both first fiscal quarters ended April 3, 2021 and March 28, 2020. The estimated amortization expense for the next five fiscal years is as follows: (dollars in thousands) Amortization expense Remainder of 2021 $ 2,797 2022 $ 3,730 2023 $ 3,688 2024 $ 3,658 2025 $ 3,658 2026 $ 3,658 |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Apr. 03, 2021 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCK Open Market Share Repurchases The Company repurchased and retired shares in open market transactions in the following amounts for the fiscal periods indicated: Fiscal quarter ended April 3, 2021 March 28, 2020 Number of shares repurchased — 474,684 Aggregate cost of shares repurchased (dollars in thousands) $ — $ 45,255 Average price per share $ — $ 95.34 The total aggregate remaining capacity under outstanding repurchase authorizations as of April 3, 2021 was approximately $650.4 million, based on settled repurchase transactions. The share repurchase authorizations have no expiration date. As previously announced, the Company, in connection with the COVID-19 pandemic, suspended its common stock share repurchase program at the end of the first quarter in fiscal 2020. While the Company may elect to resume purchases at any time, the timing and amount of any future repurchases will be determined by the Company based on its evaluation of market conditions, share price, other investment priorities, and other factors. Dividends On May 1, 2020, in connection with the COVID-19 pandemic, the Company suspended its quarterly cash dividend. As a result, the Company did not declare or pay cash dividends for the first quarter of fiscal 2021. In the first fiscal quarter ended March 28, 2020, the Company declared and paid cash dividends per share of $0.60. On April 27, 2021, in connection with the announcement of the amendment on the Company’s revolving credit facility, the Company’s Board of Directors authorized a quarterly cash dividend payment of $0.40 per common share, payable on May 28, 2021, to shareholders of record at the close of business on May 12, 2021. The Board of Directors will evaluate future dividend declarations based on a number of factors, including restrictions under the Company’s revolving credit facility, business conditions, the Company’s financial performance, and other considerations. Provisions in the Company’s secured revolving credit facility could have the effect of restricting the Company’s ability to pay cash dividends on, or make future repurchases of, its common stock, as further described in Note 8, Long-term Debt , to the consolidated financial statements. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Apr. 03, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 $500 million 5.500% Senior Notes due May 15, 2025 $ 500,000 $ 500,000 $ — $500 million 5.625% Senior Notes due March 15, 2027 500,000 500,000 500,000 Total senior notes $ 1,000,000 $ 1,000,000 $ 500,000 Less unamortized issuance-related costs for senior notes (10,020) (10,470) (5,178) Senior notes, net $ 989,980 $ 989,530 $ 494,822 Secured revolving credit facility — — 744,000 Total long-term debt, net $ 989,980 $ 989,530 $ 1,238,822 Secured Revolving Credit Facility As of April 3, 2021, the Company had no outstanding borrowings under its secured revolving credit facility, exclusive of $5.0 million of outstanding letters of credit. As of April 3, 2021, approximately $745.0 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 April 3, 2021, the interest rate margins applicable to the secured revolving credit facility were 1.625% for LIBOR (London Interbank Offered Rate) rate loans and 0.625% for base rate loans. In the first quarter of fiscal 2021, there were no changes in our financial and other covenants under the secured revolving credit facility as described in our Form 10-K for the 2020 fiscal year ended January 2, 2021. As of April 3, 2021, the Company was in compliance with its financial and other covenants under the secured revolving credit facility. On April 21, 2021, the Company, through its wholly owned subsidiary, The William Carter Company (“TWCC”), entered into Amendment No. 3 to its fourth amended and restated credit agreement (“Amendment No. 3”). Among other things, Amendment No. 3 provides that through the remainder of the Restricted Period, which ends on the date the Company delivers its financial statements and associated certificates relating to the third fiscal quarter of 2021: • the Company must maintain a minimum liquidity (defined as cash-on-hand plus availability under the secured revolving credit facility) on the last day of each fiscal month of at least $950 million (the “Revised Liquidity Requirement”), which was increased by $250 million from $700 million; and • the Company may make additional restricted payments, including to pay cash dividends and repurchase common stock, in an amount not to exceed $250 million, provided that (a) no default or event of default will have occurred and be continuing or would result from the payment and (b) after giving effect to the payment, the Company would have been in compliance with Revised Liquidity Requirement as of the last day of the most recent month. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Apr. 03, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company recorded stock-based compensation expense as follows: Fiscal quarter ended (dollars in thousands) April 3, 2021 March 28, 2020 Stock options $ 474 $ 883 Restricted stock: Time-based awards 3,900 2,989 Performance-based awards 2,557 (1,927) Total $ 6,931 $ 1,945 On February 10, 2021, the Company’s Board of Directors approved the issuance of the following new awards to certain key employees under the Company’s existing stock-based compensation plan, subject to vesting: 301,584 shares of time-based restricted stock awards with a grant-date fair value of $98.05 each. During the first quarter of fiscal 2021, a total of 94,589 restricted stock awards (time-based) vested. 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 first quarter of 2021, the achievement of performance target estimates related to certain performance-based grants were revised resulting in a $2.6 million increase to stock-based compensation expense. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Apr. 03, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As of April 3, 2021, the Company had gross unrecognized income tax benefits of approximately $15.6 million, of which $11.0 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 April 3, 2021 is approximately $2.1 million of reserves for which the statute of limitations is expected to expire within the next 12 months. If these tax benefits are ultimately recognized, such recognition, net of federal income taxes, may affect the annual effective income tax rate for fiscal 2021 or fiscal 2022 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 first fiscal quarter ended April 3, 2021 and March 28, 2020, interest expense on uncertain tax positions was not material. The Company had approximately $2.9 million, $2.7 million, and $2.5 million of interest accrued on uncertain tax positions as of April 3, 2021, January 2, 2021, and March 28, 2020, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Apr. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS 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. All of the marketable securities are included in Other assets on the accompanying consolidated balance sheets, and their aggregate fair values were approximately $15.4 million, $20.2 million, and $16.7 million at April 3, 2021, January 2, 2021, and March 28, 2020, respectively. These investments are classified as Level 1 within the fair value hierarchy. The change in the aggregate fair values of marketable securities are due to the net activity of gains and losses and any contributions and distributions during the period. Gains on the investments in marketable securities were not material for the first fiscal quarter ended April 3, 2021. Loss on the investments in marketable securities were $3.0 million for the first fiscal quarter ended March 28, 2020. These amounts are included in Other expense (income), net on the Company’s consolidated statement of operations. Borrowings As of April 3, 2021, the Company had no outstanding borrowings under its secured revolving credit facility. The fair value of the Company’s senior notes at April 3, 2021 was approximately $1.06 billion. The fair value of these senior notes with a notional value and carrying value (gross of debt issuance costs) of $1.00 billion 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 | 3 Months Ended |
Apr. 03, 2021 | |
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 April 3, 2021 March 28, 2020 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 43,370,744 43,355,635 Dilutive effect of equity awards (1) 129,198 — Diluted number of common and common equivalent shares outstanding 43,499,942 43,355,635 Earnings per share: (dollars in thousands, except per share data) Basic net income (loss) per common share: Net income (loss) $ 86,196 $ (78,694) Income allocated to participating securities (1,033) (254) Net income (loss) available to common shareholders $ 85,163 $ (78,948) Basic net income (loss) per common share $ 1.96 $ (1.82) Diluted net income (loss) per common share: Net income (loss) $ 86,196 $ (78,694) Income allocated to participating securities (1,030) (254) Net income (loss) available to common shareholders $ 85,166 $ (78,948) Diluted net income (loss) per common share $ 1.96 $ (1.82) Anti-dilutive awards excluded from diluted earnings per share computation (2) 481,491 302,238 (1) For the quarter ended March 28, 2020, there were 339,841 potentially dilutive equity awards that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. (2) The volume of anti-dilutive awards is, in part, due to the related unamortized compensation costs. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 3 Months Ended |
Apr. 03, 2021 | |
Accrued Liabilities, Current [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES Other current liabilities at the end of any comparable period, were as follows: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 Income taxes payable $ 40,143 $ 21,164 $ 7,665 Unredeemed gift cards 17,426 18,300 16,758 Accrued employee benefits 17,307 22,876 9,908 Accrued taxes 16,054 10,900 7,378 Accrued interest 11,987 12,092 1,605 Accrued bonuses and incentive compensation 10,222 8,873 24 Accrued salaries and wages 4,773 10,650 11,911 Other 31,999 30,385 23,886 Other current liabilities $ 149,911 $ 135,240 $ 79,135 |
COMMITMENT AND CONTINGENCIES
COMMITMENT AND CONTINGENCIES | 3 Months Ended |
Apr. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT 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. The Company's contractual obligations and commitments include obligations associated with leases, the secured revolving credit agreement, senior notes, employee benefit plans, and facility consolidations/closures as disclosed in Note 16, Organizational Restructuring and Office Consolidation , to the consolidated financial statements. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Apr. 03, 2021 | |
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 (dollars in thousands) April 3, 2021 % of Total Net Sales March 28, 2020 % of Total Net Sales Net sales : U.S. Retail $ 407,067 51.7 % $ 320,717 49.0 % U.S. Wholesale 283,377 36.0 % 252,130 38.5 % International 96,917 12.3 % 81,626 12.5 % Total net sales $ 787,361 100.0 % $ 654,473 100.0 % Operating income (loss) : % of Segment Net Sales % of Segment Net Sales U.S. Retail $ 76,521 18.8 % $ (32,376) (10.1) % U.S. Wholesale 70,058 24.7 % 2,231 0.9 % International 9,734 10.0 % (27,705) (33.9) % Corporate expenses (*) (28,817) n/a (20,628) n/a Total operating income (loss) $ 127,496 16.2 % $ (78,478) (12.0) % (*) 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. Fiscal quarter ended April 3, 2021 (dollars in millions) U.S. Retail U.S. Wholesale International Incremental costs associated with COVID-19 pandemic $ 1.1 $ 0.9 $ 0.1 Gain on modification of retail store leases (1) (1.5) — — Total charges (2)(3) $ (0.4) $ 0.9 $ 0.1 (1) Related to gains on the modification of previously impaired retail store leases. (2) The first fiscal quarter ended April 3, 2021 also includes corporate charges related to organizational restructuring of $0.5 million. (3) Total charges exclude a customer bankruptcy recovery of $38,000. Fiscal quarter ended March 28, 2020 (dollars in millions) U.S. Retail U.S. Wholesale International Organizational restructuring (*) $ 1.5 $ 0.6 $ 0.3 Goodwill impairment — — 17.7 Skip Hop tradename impairment charge 0.5 6.8 3.7 OshKosh tradename impairment charge 13.6 1.6 0.3 Incremental costs associated with COVID-19 pandemic 2.2 0.3 0.3 Retail store operating leases and long-lived asset impairments 1.2 — — Total charges $ 19.0 $ 9.3 $ 22.3 (*) The first fiscal quarter ended March 28, 2020 also includes corporate charges related to organizational restructuring of $1.6 million. |
ORGANIZATIONAL RESTRUCTURING AN
ORGANIZATIONAL RESTRUCTURING AND OFFICE CONSOLIDATION | 3 Months Ended |
Apr. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
ORGANIZATIONAL RESTRUCTURING AND OFFICE CONSOLIDATION | ORGANIZATIONAL RESTRUCTURING AND OFFICE CONSOLIDATION As previously announced, the Company initiated several organizational restructuring initiatives which included a reorganization of staffing models across multiple functions to drive labor savings and increase efficiencies, the consolidation of certain functions into our corporate headquarters in Atlanta, Georgia, and over 100 planned store closures by the end of fiscal 2021. In conjunction with these initiatives, the Company recorded the following charges in selling, general and administrative expenses: Fiscal quarter ended (dollars in thousands) April 3, 2021 March 28, 2020 Severance and other termination benefits (*) $ (85) $ 2,890 Relocation and recruiting 7 482 Lease exit costs 549 431 Other closure costs 23 86 Total $ 494 $ 3,889 (*) Severance and other termination benefits in the first quarter of fiscal 2021 reflect revised employee assumptions. The Company paid approximately $3.0 million in severance and other termination benefits during the first fiscal quarter ended April 3, 2021. As of April 3, 2021, there was approximately $4.6 million in reserves related to severance and other termination benefits expected to be paid out during fiscal 2021 included in Other current liabilities in the accompanying unaudited consolidated balance sheet. The Company expects to incur additional restructuring-related charges of approximately $1.0 million to $1.5 million through fiscal 2021. These charges primarily relate to accelerated depreciation and severance. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Apr. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revision of Previously Issued Financial Statements | Revision of Previously Issued Financial Statements During the second quarter of fiscal year 2020, it was determined that there were amounts presented incorrectly in the statement of cash flows for the annual and interim year to date periods subsequent to the December 30, 2018 adoption of ASC 842, Leases , due to the presentation of the non-cash impact of the initial and subsequent recognition of the Right of Use (“ROU”) assets and lease liabilities within the “Prepaid expenses and other assets” and “Accounts payable and other liabilities” line items, respectively, within operating cash flows. This incorrect presentation had no impact on net cash (used in) provided by operating activities for any of the periods. We assessed the materiality of the incorrect presentation and concluded that the previously issued financial statements were not materially misstated. The presentation errors resulted in an offsetting overstatement of cash used for prepaid expenses and other assets and cash provided by accounts payable and other liabilities of $29 million for the three months ended March 28, 2020. The accompanying consolidated statement of cash flows appropriately reflect the corrected presentation of these non-cash activities. In addition, the Company has reclassified prior comparable period amounts to present ROU asset amortization and lease liability payment activity on a net basis within the “Accounts payable and other liabilities” line item. The revisions to the three months ended March 31, 2020 have been presented in this Form 10-Q. We will continue to provide supplemental noncash cash flow disclosure information in the notes to the financial statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated revenues from these sources for the first quarter of fiscal 2021 and 2020 were as follows: Fiscal quarter ended April 3, 2021 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 283,377 $ 42,792 $ 326,169 Direct-to-consumer 407,067 — 54,125 461,192 $ 407,067 $ 283,377 $ 96,917 $ 787,361 Royalty income $ 3,070 $ 3,775 $ 618 $ 7,463 Fiscal quarter ended March 28, 2020 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 252,130 $ 38,730 $ 290,860 Direct-to-consumer 320,717 — 42,896 363,613 $ 320,717 $ 252,130 $ 81,626 $ 654,473 Royalty income $ 2,494 $ 4,083 $ 761 $ 7,338 Accounts Receivable from Customers and Licensees The components of Accounts receivable, net, were as follows: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 Trade receivables from wholesale customers, net (1) $ 234,643 $ 180,830 $ 219,140 Royalties receivable 7,090 5,733 6,428 Tenant allowances and other receivables 11,664 12,315 11,968 Total gross receivables $ 253,397 $ 198,878 $ 237,536 Less: Wholesale accounts receivable reserves (1)(2) (13,185) (12,366) (15,652) Accounts receivable, net $ 240,212 $ 186,512 $ 221,884 (1) The Company reclassified $2.0 million of customer support related items from Wholesale accounts receivable reserves into Trade receivables from wholesale customers, net for the period ended March 28, 2020. (2) Includes allowance for credit losses of $6.7 million, $5.9 million, and $10.6 million for the periods ended April 3, 2021, January 2, 2021, and March 28, 2020, respectively. |
Contract with Customer, Contract Asset, Contract Liability, and Receivable | Total contract liabilities consisted of the following amounts: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 Contract liabilities - current: Unredeemed gift cards $ 17,426 $ 18,300 $ 16,758 Unredeemed customer loyalty rewards 5,893 5,241 4,503 Carter’s credit card - upfront bonus (1) 714 714 714 Total contract liabilities - current (2) $ 24,033 $ 24,255 $ 21,975 Contract liabilities - non-current $ 2,679 $ 2,857 $ 3,393 Total contract liabilities $ 26,712 $ 27,112 $ 25,368 (1) Carter’s credit card - upfront bonus - the Company received an upfront signing bonus from a third-party financial institution, which will be recognized as revenue on a straight-line basis over the term of the agreement. This amount reflects the current portion of this bonus to be recognized as revenue over the next twelve months. (2) Included with Other current liabilities on the Company's consolidated balance sheet. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Leases [Abstract] | |
Lease, Cost | The following components of lease expense are included in Selling, general and administrative expenses on the Company’s consolidated statements of operations for the first quarter of fiscal 2021 and 2020: Fiscal quarter ended (dollars in thousands) April 3, 2021 March 28, 2020 Operating lease cost $ 42,698 $ 46,423 Variable lease cost (*) 16,398 16,285 Net lease cost $ 59,096 $ 62,708 |
Lease Supplementary Disclosure | Supplemental balance sheet information related to leases was as follows: Fiscal quarter ended April 3, 2021 March 28, 2020 Weighted average remaining operating lease term (years) 5.3 5.9 Weighted average discount rate for operating leases 3.29% 4.29% Cash paid for amounts included in the measurement of operating lease liabilities in the first quarter of fiscal 2021 and 2020 were $57.9 million and $50.2 million, respectively. Non-cash transactions to recognize operating assets and liabilities for new leases in the first quarter of fiscal 2021 and 2020 were $3.3 million and $29.4 million, respectively. |
Lessee, Operating Lease, Liability, Maturity | As of April 3, 2021, the maturities of lease liabilities were as follows: (dollars in thousands) Operating leases Remainder of 2021 $ 149,606 2022 159,141 2023 130,852 2024 104,942 2025 76,530 2026 54,094 After 2026 77,693 Total lease payments $ 752,858 Less: Interest (62,866) Present value of lease liabilities (*) $ 689,992 (*) As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We used the incremental borrowing rate on December 30, 2018, for operating leases that commenced prior to that date. |
ACUMULATED OTHER COMPREHENSIV_2
ACUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Text Block [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of Accumulated other comprehensive loss consisted of the following: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 Cumulative foreign currency translation adjustments $ (20,081) $ (21,307) $ (39,514) Pension and post-retirement obligations (*) (11,453) (11,453) (9,112) Total accumulated other comprehensive loss $ (31,534) $ (32,760) $ (48,626) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The balances and changes in the carrying amount of goodwill attributable to each segment were as follows: (dollars in thousands) U.S. Retail U.S. Wholesale International Total Balance at December 28, 2019 $ 83,934 $ 74,454 $ 70,638 $ 229,026 Goodwill impairment (1) — — (17,742) (17,742) Foreign currency impact — — (3,564) (3,564) Balance at March 28, 2020 (2) $ 83,934 $ 74,454 $ 49,332 $ 207,720 Balance at January 2, 2021 (2) $ 83,934 $ 74,454 $ 53,388 $ 211,776 Foreign currency impact — — 495 495 Balance at April 3, 2021 (2) $ 83,934 $ 74,454 $ 53,883 $ 212,271 (1) In the first quarter of fiscal 2020, a charge of $17.7 million was recorded to reflect the impairment of the value ascribed to the goodwill in the Other International reporting unit in the International segment. (2) Goodwill balance for the International reporting unit is net of accumulated impairment losses of $17.7 million. |
Schedule Of Goodwill and Other Intangible Assets | A summary of the carrying value of the Company’s intangible assets were as follows: April 3, 2021 January 2, 2021 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Gross amount Accumulated amortization Net amount Carter’s tradename Indefinite $ 220,233 $ — $ 220,233 $ 220,233 $ — $ 220,233 OshKosh tradename Indefinite 70,000 — 70,000 70,000 — 70,000 Skip Hop tradename Indefinite 15,000 — 15,000 15,000 — 15,000 Finite-life tradenames 5 -20 years 3,911 1,314 2,597 3,911 1,251 2,660 Total tradenames, net $ 309,144 $ 1,314 $ 307,830 $ 309,144 $ 1,251 $ 307,893 Skip Hop customer relationships 15 years $ 47,300 $ 12,628 $ 34,672 $ 47,300 $ 11,834 $ 35,466 Carter’s Mexico customer relationships 10 years 3,063 1,139 1,924 3,108 1,064 2,044 Total customer relationships, net $ 50,363 $ 13,767 $ 36,596 $ 50,408 $ 12,898 $ 37,510 March 28, 2020 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Carter’s tradename Indefinite $ 220,233 $ — $ 220,233 OshKosh tradename (1) Indefinite 70,000 — 70,000 Skip Hop tradename (2) Indefinite 15,000 — 15,000 Finite-life tradenames 5 - 20 years 3,911 1,064 2,847 Total tradenames, net $ 309,144 $ 1,064 $ 308,080 Skip Hop customer relationships 15 years $ 47,300 $ 9,451 $ 37,849 Carter’s Mexico customer relationships 10 years 2,790 854 1,936 Total customer relationships, net $ 50,090 $ 10,305 $ 39,785 (1) In the first quarter of fiscal 2020, a charge of $13.6 million, $1.6 million, and $0.3 million was recorded on our indefinite-lived OshKosh tradename asset in the U.S. Retail, U.S. Wholesale, and International segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived OshKosh tradename asset. (2) In the first quarter of fiscal 2020, a charge of $6.8 million, $3.7 million, and $0.5 million was recorded on our indefinite-lived Skip Hop tradename asset in the U.S. Wholesale, International, and U.S. Retail segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived Skip Hop tradename asset. |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Equity [Abstract] | |
Open Market Repurchases | The Company repurchased and retired shares in open market transactions in the following amounts for the fiscal periods indicated: Fiscal quarter ended April 3, 2021 March 28, 2020 Number of shares repurchased — 474,684 Aggregate cost of shares repurchased (dollars in thousands) $ — $ 45,255 Average price per share $ — $ 95.34 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: (dollars in thousands) April 3, 2021 January 2, 2021 March 28, 2020 $500 million 5.500% Senior Notes due May 15, 2025 $ 500,000 $ 500,000 $ — $500 million 5.625% Senior Notes due March 15, 2027 500,000 500,000 500,000 Total senior notes $ 1,000,000 $ 1,000,000 $ 500,000 Less unamortized issuance-related costs for senior notes (10,020) (10,470) (5,178) Senior notes, net $ 989,980 $ 989,530 $ 494,822 Secured revolving credit facility — — 744,000 Total long-term debt, net $ 989,980 $ 989,530 $ 1,238,822 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Recorded Stock-based Compensation Cost | The Company recorded stock-based compensation expense as follows: Fiscal quarter ended (dollars in thousands) April 3, 2021 March 28, 2020 Stock options $ 474 $ 883 Restricted stock: Time-based awards 3,900 2,989 Performance-based awards 2,557 (1,927) Total $ 6,931 $ 1,945 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding: Fiscal quarter ended April 3, 2021 March 28, 2020 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 43,370,744 43,355,635 Dilutive effect of equity awards (1) 129,198 — Diluted number of common and common equivalent shares outstanding 43,499,942 43,355,635 Earnings per share: (dollars in thousands, except per share data) Basic net income (loss) per common share: Net income (loss) $ 86,196 $ (78,694) Income allocated to participating securities (1,033) (254) Net income (loss) available to common shareholders $ 85,163 $ (78,948) Basic net income (loss) per common share $ 1.96 $ (1.82) Diluted net income (loss) per common share: Net income (loss) $ 86,196 $ (78,694) Income allocated to participating securities (1,030) (254) Net income (loss) available to common shareholders $ 85,166 $ (78,948) Diluted net income (loss) per common share $ 1.96 $ (1.82) Anti-dilutive awards excluded from diluted earnings per share computation (2) 481,491 302,238 (1) For the quarter ended March 28, 2020, there were 339,841 potentially dilutive equity awards that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. (2) The volume of anti-dilutive awards is, in part, due to the related unamortized compensation costs. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The table below presents certain information for our reportable segments and unallocated corporate expenses for the periods indicated: Fiscal quarter ended (dollars in thousands) April 3, 2021 % of Total Net Sales March 28, 2020 % of Total Net Sales Net sales : U.S. Retail $ 407,067 51.7 % $ 320,717 49.0 % U.S. Wholesale 283,377 36.0 % 252,130 38.5 % International 96,917 12.3 % 81,626 12.5 % Total net sales $ 787,361 100.0 % $ 654,473 100.0 % Operating income (loss) : % of Segment Net Sales % of Segment Net Sales U.S. Retail $ 76,521 18.8 % $ (32,376) (10.1) % U.S. Wholesale 70,058 24.7 % 2,231 0.9 % International 9,734 10.0 % (27,705) (33.9) % Corporate expenses (*) (28,817) n/a (20,628) n/a Total operating income (loss) $ 127,496 16.2 % $ (78,478) (12.0) % (*) 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. Fiscal quarter ended April 3, 2021 (dollars in millions) U.S. Retail U.S. Wholesale International Incremental costs associated with COVID-19 pandemic $ 1.1 $ 0.9 $ 0.1 Gain on modification of retail store leases (1) (1.5) — — Total charges (2)(3) $ (0.4) $ 0.9 $ 0.1 (1) Related to gains on the modification of previously impaired retail store leases. (2) The first fiscal quarter ended April 3, 2021 also includes corporate charges related to organizational restructuring of $0.5 million. (3) Total charges exclude a customer bankruptcy recovery of $38,000. Fiscal quarter ended March 28, 2020 (dollars in millions) U.S. Retail U.S. Wholesale International Organizational restructuring (*) $ 1.5 $ 0.6 $ 0.3 Goodwill impairment — — 17.7 Skip Hop tradename impairment charge 0.5 6.8 3.7 OshKosh tradename impairment charge 13.6 1.6 0.3 Incremental costs associated with COVID-19 pandemic 2.2 0.3 0.3 Retail store operating leases and long-lived asset impairments 1.2 — — Total charges $ 19.0 $ 9.3 $ 22.3 (*) The first fiscal quarter ended March 28, 2020 also includes corporate charges related to organizational restructuring of $1.6 million. |
ORGANIZATIONAL RESTRUCTURING _2
ORGANIZATIONAL RESTRUCTURING AND OFFICE CONSOLIDATION (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
Organizational Restructuring and Office Consolidation Cost | In conjunction with these initiatives, the Company recorded the following charges in selling, general and administrative expenses: Fiscal quarter ended (dollars in thousands) April 3, 2021 March 28, 2020 Severance and other termination benefits (*) $ (85) $ 2,890 Relocation and recruiting 7 482 Lease exit costs 549 431 Other closure costs 23 86 Total $ 494 $ 3,889 (*) Severance and other termination benefits in the first quarter of fiscal 2021 reflect revised employee assumptions. |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Increase (decrease) in prepaid expense and other assets | $ 5,186 | $ (7,254) | |
Benefit in fabric purchase commitment charges | (6,300) | ||
Inventory valuation reserves | 15,581 | 35,597 | $ 14,206 |
Purchase Commitment | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Inventory valuation reserves | 6,300 | ||
COVID 19 COST | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Other expenses | $ 2,100 | ||
Restatement Adjustment Member | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Increase (decrease) in prepaid expense and other assets | $ 29,000 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 787,361 | $ 654,473 | |
Trade receivables from wholesale customers, net | 253,397 | 237,536 | $ 198,878 |
Less: Wholesale accounts receivable reserves | (6,695) | (10,620) | (5,940) |
Accounts receivable, net | 240,212 | 221,884 | 186,512 |
Reclassification of accounts receivable, gross, current | 2,000 | ||
Trade Accounts Receivable | |||
Disaggregation of Revenue [Line Items] | |||
Trade receivables from wholesale customers, net | 234,643 | 219,140 | 180,830 |
Royalties receivable | |||
Disaggregation of Revenue [Line Items] | |||
Trade receivables from wholesale customers, net | 7,090 | 6,428 | 5,733 |
Tenant allowances and other receivables | |||
Disaggregation of Revenue [Line Items] | |||
Trade receivables from wholesale customers, net | 11,664 | 11,968 | 12,315 |
SEC Schedule, 12-09, Allowance, Credit Loss | |||
Disaggregation of Revenue [Line Items] | |||
Less: Wholesale accounts receivable reserves | (13,185) | (15,652) | $ (12,366) |
U.S. Retail | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 407,067 | 320,717 | |
U.S. Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 283,377 | 252,130 | |
International | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 96,917 | 81,626 | |
5130 Wholesale, Apparel, Piece Goods and Notions | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 326,169 | 290,860 | |
5130 Wholesale, Apparel, Piece Goods and Notions | U.S. Retail | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 0 | 0 | |
5130 Wholesale, Apparel, Piece Goods and Notions | U.S. Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 283,377 | 252,130 | |
5130 Wholesale, Apparel, Piece Goods and Notions | International | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 42,792 | 38,730 | |
5600 Retail, Apparel and Accessory Stores | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 461,192 | 363,613 | |
5600 Retail, Apparel and Accessory Stores | U.S. Retail | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 407,067 | 320,717 | |
5600 Retail, Apparel and Accessory Stores | U.S. Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 0 | 0 | |
5600 Retail, Apparel and Accessory Stores | International | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 54,125 | 42,896 | |
Licensing Agreements | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 7,463 | 7,338 | |
Licensing Agreements | U.S. Retail | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,070 | 2,494 | |
Licensing Agreements | U.S. Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,775 | 4,083 | |
Licensing Agreements | International | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 618 | $ 761 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Revenue from Contract with Customer [Abstract] | |||
Unredeemed gift cards | $ 17,426 | $ 18,300 | $ 16,758 |
Unredeemed customer loyalty rewards | 5,893 | 5,241 | 4,503 |
Carter's credit card - upfront bonus | 714 | 714 | 714 |
Total contract liabilities - current | 24,033 | 24,255 | 21,975 |
Contract liabilities - non-current | 2,679 | 2,857 | 3,393 |
Total contract liabilities | $ 26,712 | $ 27,112 | $ 25,368 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 3 Months Ended |
Apr. 03, 2021USD ($) | |
Lessee, Lease, Description [Line Items] | |
Minimum rental commitments for contracts not yet commenced | $ 6.9 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Initial term | 1 year |
Lease term for contracts not yet commenced | 7 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Initial term | 10 years |
Extension option term | 5 years |
Lease term for contracts not yet commenced | 9 years |
LEASES - Schedule of Lease Expe
LEASES - Schedule of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 42,698 | $ 46,423 |
Variable lease cost | 16,398 | 16,285 |
Net lease cost | $ 59,096 | $ 62,708 |
LEASES - Supplemental balance s
LEASES - Supplemental balance sheet information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Leases [Abstract] | ||
Weighted average remaining operating lease term (years) | 5 years 3 months 18 days | 5 years 10 months 24 days |
Weighted average discount rate for operating leases | 3.29% | 4.29% |
Operating lease payments | $ 57.9 | $ 50.2 |
Non-cash transaction | $ 3.3 | $ 29.4 |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) $ in Thousands | Apr. 03, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 149,606 |
2022 | 159,141 |
2023 | 130,852 |
2024 | 104,942 |
2025 | 76,530 |
2026 | 54,094 |
After 2026 | 77,693 |
Total lease payments | 752,858 |
Less: Interest | (62,866) |
Present value of lease liabilities | $ 689,992 |
ACUMULATED OTHER COMPREHENSIV_3
ACUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Text Block [Abstract] | |||
Cumulative foreign currency translation adjustments | $ (20,081) | $ (39,514) | $ (21,307) |
Pension and post-retirement obligations | (11,453) | (9,112) | (11,453) |
Accumulated other comprehensive loss | (31,534) | (48,626) | (32,760) |
Net income taxes attributable to pension plan | $ 3,500 | $ 2,800 | $ 3,500 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | Dec. 28, 2019 | |
Goodwill [Line Items] | ||||
Goodwill, gross | $ 211,776 | $ 229,026 | ||
Goodwill impairment | $ 0 | $ 17,742 | ||
Foreign currency impact | 495 | (3,564) | ||
Goodwill | 212,271 | 207,720 | 211,776 | |
Intangible asset impairment | 0 | 26,500 | ||
Amortization expense for intangible assets | 900 | 900 | ||
Remainder of 2021 | 2,797 | |||
2022 | 3,730 | |||
2023 | 3,688 | |||
2024 | 3,658 | |||
2025 | 3,658 | |||
2026 | 3,658 | |||
Other Tradenames [Member] | ||||
Goodwill [Line Items] | ||||
Finite-lived intangible assets, gross | 3,911 | 3,911 | 3,911 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,314 | 1,064 | 1,251 | |
Net amount | $ 2,597 | $ 2,847 | 2,660 | |
Other Tradenames [Member] | Minimum | ||||
Goodwill [Line Items] | ||||
Weighted-average useful life | 5 years | 5 years | ||
Other Tradenames [Member] | Maximum | ||||
Goodwill [Line Items] | ||||
Weighted-average useful life | 20 years | 20 years | ||
Trade Names | ||||
Goodwill [Line Items] | ||||
Finite-lived intangible assets, gross | $ 309,144 | $ 309,144 | 309,144 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,314 | 1,064 | 1,251 | |
Net amount | 307,830 | 308,080 | 307,893 | |
Skip Hop customer relationships | ||||
Goodwill [Line Items] | ||||
Finite-lived intangible assets, gross | 47,300 | 47,300 | 47,300 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 12,628 | 9,451 | 11,834 | |
Net amount | $ 34,672 | $ 37,849 | 35,466 | |
Weighted-average useful life | 15 years | 15 years | ||
Carter’s Mexico customer relationships | ||||
Goodwill [Line Items] | ||||
Finite-lived intangible assets, gross | $ 3,063 | $ 2,790 | 3,108 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,139 | 854 | 1,064 | |
Net amount | $ 1,924 | $ 1,936 | 2,044 | |
Weighted-average useful life | 10 years | 10 years | ||
Customer Relationships | ||||
Goodwill [Line Items] | ||||
Finite-lived intangible assets, gross | $ 50,363 | $ 50,090 | 50,408 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 13,767 | 10,305 | 12,898 | |
Net amount | 36,596 | 39,785 | 37,510 | |
Carters Trade Name | ||||
Goodwill [Line Items] | ||||
Indefinite-lived intangible assets (excluding goodwill) | 220,233 | 220,233 | 220,233 | |
OshKosh tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Indefinite-lived intangible assets (excluding goodwill) | 70,000 | 70,000 | 70,000 | |
Skip Hop tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Indefinite-lived intangible assets (excluding goodwill) | 15,000 | 15,000 | 15,000 | |
U.S. Retail | ||||
Goodwill [Line Items] | ||||
Goodwill, gross | 83,934 | 83,934 | ||
Goodwill impairment | 0 | |||
Foreign currency impact | 0 | 0 | ||
Goodwill | 83,934 | 83,934 | ||
U.S. Retail | OshKosh tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Intangible asset impairment | 13,600 | |||
U.S. Retail | Skip Hop tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Intangible asset impairment | 500 | |||
U.S. Wholesale | ||||
Goodwill [Line Items] | ||||
Goodwill, gross | 74,454 | 74,454 | ||
Goodwill impairment | 0 | |||
Foreign currency impact | 0 | 0 | ||
Goodwill | 74,454 | 74,454 | ||
U.S. Wholesale | OshKosh tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Intangible asset impairment | 1,600 | |||
U.S. Wholesale | Skip Hop tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Intangible asset impairment | 6,800 | |||
International | ||||
Goodwill [Line Items] | ||||
Goodwill, gross | $ 53,388 | $ 70,638 | ||
Goodwill impairment | 17,742 | |||
Foreign currency impact | 495 | (3,564) | ||
Goodwill | 53,883 | 49,332 | ||
Goodwill, net of accumulated impairment losses | $ 17,700 | |||
International | OshKosh tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Intangible asset impairment | 300 | |||
International | Skip Hop tradename impairment charge | ||||
Goodwill [Line Items] | ||||
Intangible asset impairment | 3,700 | |||
Other International Reporting Unit Member | ||||
Goodwill [Line Items] | ||||
Goodwill impairment | $ 17,700 |
COMMON STOCK - Schedule (Detail
COMMON STOCK - Schedule (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Equity [Abstract] | ||
Number of share repurchased (in shares) | 0 | 474,684 |
Aggregate cost of shares repurchased (dollars in thousands) | $ 0 | $ 45,255 |
Average price per share (in USD per share) | $ 0 | $ 95.34 |
Aggregate remaining capacity under repurchase authorization | $ 650,400 |
COMMON STOCK - Dividends (Detai
COMMON STOCK - Dividends (Details) - $ / shares | Apr. 27, 2021 | Apr. 03, 2021 | Mar. 28, 2020 |
Equity [Abstract] | |||
Dividend declared and paid per common share (in USD per share) | $ 0 | $ 0.60 | |
Class of Stock [Line Items] | |||
Dividend declared and paid per common share (in USD per share) | $ 0 | $ 0.60 | |
Subsequent Event | |||
Equity [Abstract] | |||
Dividend declared and paid per common share (in USD per share) | $ 0.40 | ||
Class of Stock [Line Items] | |||
Dividend declared and paid per common share (in USD per share) | $ 0.40 |
LONG-TERM DEBT - Schedule (Deta
LONG-TERM DEBT - Schedule (Details) - USD ($) | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Debt Instrument [Line Items] | |||
Long-term debt, net | $ 989,980,000 | $ 989,530,000 | $ 1,238,822,000 |
Total Senior Notes Member | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 1,000,000,000 | 1,000,000,000 | 500,000,000 |
Less unamortized issuance-related costs for senior notes | (10,020,000) | (10,470,000) | (5,178,000) |
Senior notes, net | 989,980,000 | 989,530,000 | 494,822,000 |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Secured revolving credit facility | 0 | 0 | 744,000,000 |
Five Point Five Percent Senior Notes due Twenty Twenty Five | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 500,000,000 | 500,000,000 | 0 |
Interest rate | 5.50% | ||
Five Point Six Two Five Percent Senior Notes due Twenty Twenty Seven Member | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 |
Interest rate | 5.625% |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | Apr. 21, 2021 | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Debt Instrument [Line Items] | ||||
Letters of Credit Outstanding, Amount | $ 5,000,000 | |||
Amendment No. 3 | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | $ 950,000,000 | |||
Increased in Minimum liquidity | 250,000,000 | |||
Amendment No. 2 | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | 700,000,000 | |||
Maximum | Amendment No. 3 | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Additional restricted payments | $ 250,000,000 | |||
London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.625% | |||
Base Rate | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.625% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Secured revolving credit facility | $ 0 | $ 0 | $ 744,000,000 | |
Remaining borrowing capacity | $ 745,000,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 10, 2021 | Apr. 03, 2021 | Mar. 28, 2020 |
Performance-based awards | |||
Stock-based compensation expense | $ 6,931 | $ 1,945 | |
Total stock-based compensation expense | (6,931) | (1,945) | |
Stock options | |||
Performance-based awards | |||
Stock-based compensation expense | 474 | 883 | |
Time-based awards | |||
Performance-based awards | |||
Stock-based compensation expense | $ 3,900 | 2,989 | |
Time-based awards granted (in shares) | 301,584 | ||
Grant-date fair value of shares issued (in USD per share) | $ 98.05 | ||
Time-based awards vest (in shares) | 94,589 | ||
Performance Shares | |||
Performance-based awards | |||
Stock-based compensation expense | $ 2,557 | $ (1,927) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits | $ 15.6 | ||
Unrecognized tax benefits, impact on effective tax rate | 11 | ||
Reserves that statue of limitations is expected to expire | 2.1 | ||
Interest accrued on uncertain tax positions | $ 2.9 | $ 2.7 | $ 2.5 |
FAIR VALUE MEASUREMENTS - Inves
FAIR VALUE MEASUREMENTS - Investments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 28, 2020 | Apr. 03, 2021 | Jan. 02, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loss on investments | $ (3) | ||
Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable securities | $ 16.7 | $ 15.4 | $ 20.2 |
FAIR VALUE MEASUREMENTS - Borro
FAIR VALUE MEASUREMENTS - Borrowings (Details) - USD ($) | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Total Senior Notes Member | |||
Debt Instrument [Line Items] | |||
Fair value of senior notes | $ 1,060,000,000 | ||
Notional and carrying value of senior notes | 1,000,000,000 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Secured revolving credit facility | $ 0 | $ 0 | $ 744,000,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Weighted-average number of common and common equivalent shares outstanding: | ||
Basic number of common shares outstanding (in shares) | 43,370,744 | 43,355,635 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 129,198 | 0 |
Diluted number of common and common equivalent shares outstanding (in shares) | 43,499,942 | 43,355,635 |
Earnings per share: | ||
Net income (loss) | $ 86,196 | $ (78,694) |
Income allocated to participating securities | (1,033) | (254) |
Net income (loss) available to common shareholders | $ 85,163 | $ (78,948) |
Basic net income (loss) per common share (in USD per share) | $ 1.96 | $ (1.82) |
Diluted net income (loss) per common share: | ||
Net income (loss) | $ 86,196 | $ (78,694) |
Income allocated to participating securities | (1,030) | (254) |
Net income (loss) available to common shareholders | $ 85,166 | $ (78,948) |
Diluted net income (loss) per common share (in USD per share) | $ 1.96 | $ (1.82) |
potentially dilutive equity awards (in shares) | 481,491 | 302,238 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
potentially dilutive equity awards (in shares) | 481,491 | 302,238 |
Restricted Stock | ||
Diluted net income (loss) per common share: | ||
potentially dilutive equity awards (in shares) | 339,841 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
potentially dilutive equity awards (in shares) | 339,841 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Jan. 02, 2021 | Mar. 28, 2020 |
Accrued Liabilities, Current [Abstract] | |||
Income taxes payable | $ 40,143 | $ 21,164 | $ 7,665 |
Unredeemed gift cards | 17,426 | 18,300 | 16,758 |
Accrued employee benefits | 17,307 | 22,876 | 9,908 |
Accrued taxes | 16,054 | 10,900 | 7,378 |
Accrued interest | 11,987 | 12,092 | 1,605 |
Accrued bonuses and incentive compensation | 10,222 | 8,873 | 24 |
Accrued salaries and wages | 4,773 | 10,650 | 11,911 |
Other | 31,999 | 30,385 | 23,886 |
Other current liabilities | $ 149,911 | $ 135,240 | $ 79,135 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 787,361,000 | $ 654,473,000 |
% of Total Net Sales | 100.00% | 100.00% |
Operating income (loss) | $ 127,496,000 | $ (78,478,000) |
Corporate expenses | $ (28,817,000) | $ (20,628,000) |
% of Segment Net Sales | 16.20% | (12.00%) |
Restructuring charges | $ 494,000 | $ 3,889,000 |
Goodwill impairment | 0 | 17,742,000 |
Intangible asset impairment | 0 | 26,500,000 |
Provisions for doubtful accounts receivable from customers | 766,000 | 4,270,000 |
U.S. Retail | ||
Segment Reporting Information [Line Items] | ||
Net sales | 407,067,000 | 320,717,000 |
Goodwill impairment | 0 | |
U.S. Retail | Skip Hop tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 500,000 | |
U.S. Retail | OshKosh tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 13,600,000 | |
U.S. Wholesale | ||
Segment Reporting Information [Line Items] | ||
Net sales | 283,377,000 | 252,130,000 |
Goodwill impairment | 0 | |
U.S. Wholesale | Skip Hop tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 6,800,000 | |
U.S. Wholesale | OshKosh tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 1,600,000 | |
International | ||
Segment Reporting Information [Line Items] | ||
Goodwill impairment | 17,742,000 | |
International | Skip Hop tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 3,700,000 | |
International | OshKosh tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 300,000 | |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Restructuring charges | 500,000 | 1,600,000 |
Operating Segments | U.S. Retail | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 407,067,000 | $ 320,717,000 |
% of Total Net Sales | 51.70% | 49.00% |
Operating income (loss) | $ 76,521,000 | $ (32,376,000) |
% of Segment Net Sales | 18.80% | (10.10%) |
Restructuring charges | $ 1,500,000 | |
Goodwill impairment | 0 | |
Incremental costs associated with COVID-19 pandemic | $ 1,100,000 | 2,200,000 |
Gain on modification of retail store leases | 1,500,000 | |
Retail store operating leases and long-lived asset impairments | 1,200,000 | |
Total charges | 400,000 | 19,000,000 |
Operating Segments | U.S. Retail | Skip Hop tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 500,000 | |
Operating Segments | U.S. Retail | OshKosh tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 13,600,000 | |
Operating Segments | U.S. Wholesale | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 283,377,000 | $ (252,130,000) |
% of Total Net Sales | 36.00% | 38.50% |
Operating income (loss) | $ 70,058,000 | $ 2,231,000 |
% of Segment Net Sales | 24.70% | 0.90% |
Restructuring charges | $ 600,000 | |
Goodwill impairment | 0 | |
Incremental costs associated with COVID-19 pandemic | $ 900,000 | 300,000 |
Gain on modification of retail store leases | 0 | |
Retail store operating leases and long-lived asset impairments | 0 | |
Total charges | 900,000 | 9,300,000 |
Provisions for doubtful accounts receivable from customers | 38,000 | |
Operating Segments | U.S. Wholesale | Skip Hop tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 6,800,000 | |
Operating Segments | U.S. Wholesale | OshKosh tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 1,600,000 | |
Operating Segments | International | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 96,917,000 | $ 81,626,000 |
% of Total Net Sales | 12.30% | 12.50% |
Operating income (loss) | $ 9,734,000 | $ (27,705,000) |
% of Segment Net Sales | 10.00% | (33.90%) |
Restructuring charges | $ 300,000 | |
Goodwill impairment | 17,700,000 | |
Incremental costs associated with COVID-19 pandemic | $ 100,000 | 300,000 |
Gain on modification of retail store leases | 0 | |
Retail store operating leases and long-lived asset impairments | 0 | |
Total charges | $ 100,000 | 22,300,000 |
Operating Segments | International | Skip Hop tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | 3,700,000 | |
Operating Segments | International | OshKosh tradename impairment charge | ||
Segment Reporting Information [Line Items] | ||
Intangible asset impairment | $ 300,000 |
ORGANIZATIONAL RESTRUCTURING _3
ORGANIZATIONAL RESTRUCTURING AND OFFICE CONSOLIDATION (Details) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021USD ($)store | Mar. 28, 2020USD ($) | |
Organizational Restructuring and Office Consolidation [Line Items] | ||
Planned store closures | store | 100 | |
Restructuring charges | $ (494) | $ (3,889) |
Severance and other termination benefits | ||
Organizational Restructuring and Office Consolidation [Line Items] | ||
Payments for restructuring | 3,000 | |
Restructuring reserve | 4,600 | |
Severance and other termination benefits | Minimum | ||
Organizational Restructuring and Office Consolidation [Line Items] | ||
Additional restructuring-related charges | 1,000 | |
Severance and other termination benefits | Maximum | ||
Organizational Restructuring and Office Consolidation [Line Items] | ||
Additional restructuring-related charges | 1,500 | |
Selling, General and Administrative Expenses | Severance and other termination benefits | ||
Organizational Restructuring and Office Consolidation [Line Items] | ||
Restructuring charges | (85) | (2,890) |
Selling, General and Administrative Expenses | Relocation and recruiting | ||
Organizational Restructuring and Office Consolidation [Line Items] | ||
Restructuring charges | (7) | (482) |
Selling, General and Administrative Expenses | Lease exit costs | ||
Organizational Restructuring and Office Consolidation [Line Items] | ||
Restructuring charges | (549) | (431) |
Selling, General and Administrative Expenses | Other closure costs | ||
Organizational Restructuring and Office Consolidation [Line Items] | ||
Restructuring charges | $ (23) | $ (86) |