Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jul. 02, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,681,173,556 | ||
Entity Common Stock, Shares Outstanding (in shares) | 37,653,983 | ||
Documents Incorporated by Reference | Portions of the definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A relating to the Annual Meeting of shareholders of Carter’s, Inc., scheduled to be held on May 17, 2023, will be incorporated by reference in Part III of this Form 10-K. Carter’s, Inc. intends to file such proxy statement with the Securities and Exchange Commission not later than 120 days after its fiscal year ended December 31, 2022. | ||
Entity Central Index Key | 0001060822 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Atlanta, Georgia |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 | |
Current assets: | |||
Cash and cash equivalents | $ 211,748 | $ 984,294 | |
Accounts receivable, net | 198,587 | 231,354 | |
Finished goods inventories | 744,573 | 647,742 | |
Prepaid expenses and other current assets | [1] | 33,812 | 36,332 |
Total current assets | 1,188,720 | 1,899,722 | |
Property, plant, and equipment, net | 189,822 | 216,004 | |
Operating lease assets | 492,335 | 487,748 | |
Tradenames, net | 298,393 | 307,643 | |
Goodwill | 209,333 | 212,023 | |
Customer relationships, net | 30,564 | 33,969 | |
Other assets | 30,548 | 30,889 | |
Total assets | 2,439,715 | 3,187,998 | |
Current liabilities: | |||
Accounts payable | 264,078 | 407,044 | |
Current operating lease liabilities | [1] | 142,432 | 133,738 |
Other current liabilities | 122,439 | 176,449 | |
Total current liabilities | 528,949 | 717,231 | |
Long-term debt, net | 616,624 | 991,370 | |
Deferred income taxes | 41,235 | 40,910 | |
Long-term operating lease liabilities | 421,741 | 441,861 | |
Other long-term liabilities | 34,757 | 46,440 | |
Total liabilities | 1,643,306 | 2,237,812 | |
Commitments and contingencies - Note 18 | |||
Shareholders’ equity: | |||
Preferred stock; par value $0.01 per share; 100,000 shares authorized; none issued or outstanding at December 31, 2022 and January 1, 2022 | 0 | 0 | |
Common stock, voting; par value $0.01 per share; 150,000,000 shares authorized; 37,692,132 and 41,148,870 shares issued and outstanding at December 31, 2022 and January 1, 2022, respectively | 377 | 411 | |
Additional paid-in capital | 0 | 0 | |
Accumulated other comprehensive loss | (34,338) | (28,897) | |
Retained earnings | 830,370 | 978,672 | |
Total shareholders’ equity | 796,409 | 950,186 | |
Total liabilities and shareholders’ equity | $ 2,439,715 | $ 3,187,998 | |
Preferred stock; outstanding (in shares) | 0 | 0 | |
[1]Prepaid expense and other current assets and Current operating lease liabilities as of January 1, 2022 were revised to reflect the presentation for payments of rent before payment due date of $13.8 million. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit losses | $ 7,189 | $ 7,281 |
Preferred stock; par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock; shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock; issued (in shares) | 0 | 0 |
Preferred stock; outstanding (in shares) | 0 | 0 |
Common stock, voting; par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, voting; shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock voting; shares issued (in shares) | 37,692,132 | 41,148,870 |
Common stock voting; shares outstanding (in shares) | 37,692,132 | 41,148,870 |
Reclassification of prepaid expenses | $ 13,800 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Income Statement [Abstract] | |||
Net sales | $ 3,212,733 | $ 3,486,440 | $ 3,024,334 |
Cost of goods sold | 1,735,910 | 1,832,045 | 1,696,224 |
Adverse purchase commitments (inventory and raw materials), net | 4,465 | (7,879) | 14,668 |
Gross profit | 1,472,358 | 1,662,274 | 1,313,442 |
Royalty income, net | 25,820 | 28,681 | 26,276 |
Selling, general, and administrative expenses | 1,110,007 | 1,193,876 | 1,105,607 |
Goodwill impairment | 0 | 0 | 17,742 |
Intangible asset impairment | 9,000 | 0 | 26,500 |
Operating income | 379,171 | 497,079 | 189,869 |
Interest expense | 42,781 | 60,294 | 56,062 |
Interest income | (1,261) | (1,096) | (1,515) |
Other expense (income), net | 975 | (409) | 338 |
Loss on extinguishment of debt | 19,940 | 0 | 0 |
Income before income taxes | 316,736 | 438,290 | 134,984 |
Income tax provision | 66,698 | 98,542 | 25,267 |
Net income | $ 250,038 | $ 339,748 | $ 109,717 |
Basic net income per common share (in USD per share) | $ 6.34 | $ 7.83 | $ 2.51 |
Diluted net income per common share (in USD per share) | 6.34 | 7.81 | 2.50 |
Dividend declared and paid per common share (in USD per share) | $ 3 | $ 1.40 | $ 0.60 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 250,038 | $ 339,748 | $ 109,717 |
Other comprehensive income: | |||
Unrealized gain (loss) on OshKosh defined benefit plan, net of (tax expense) or tax benefit | 1,739 | 3,973 | (2,197) |
Unrealized gain (loss) on Carter's post-retirement benefit obligation, net of tax (expense) benefit | 344 | (115) | (144) |
Foreign currency translation adjustments | (7,524) | 5 | 5,215 |
Total other comprehensive (loss) income | (5,441) | 3,863 | 2,874 |
Comprehensive income | $ 244,597 | $ 343,611 | $ 112,591 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Pension Plans | |||
Unrealized gain (loss) on retirement plan, (tax expense) or tax benefit | $ (540) | $ (1,220) | $ 680 |
Postretirement Benefit | |||
Unrealized gain (loss) on retirement plan, (tax expense) or tax benefit | $ (100) | $ 40 | $ 39 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | ||
Cash flows from operating activities: | ||||
Net income | $ 250,038 | $ 339,748 | $ 109,717 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation of property, plant, and equipment | 61,543 | 90,378 | 90,284 | |
Amortization of intangible assets | 3,733 | 3,730 | 3,715 | |
Provisions for excess and obsolete inventory, net | 5,039 | 4,042 | 4,866 | |
Goodwill impairment | 0 | 0 | 17,742 | |
Intangible asset impairment | 9,000 | 0 | 26,500 | |
Other asset impairments and loss on disposal of property, plant and equipment, net of recoveries | 372 | 213 | 11,374 | |
Amortization of debt issuance costs | 1,950 | 3,052 | 2,372 | |
Stock-based compensation expense | 21,879 | 21,029 | 12,830 | |
Unrealized foreign currency exchange (gain) loss, net | (78) | 371 | 361 | |
Provisions for doubtful accounts receivable from customers | 75 | 1,345 | 6,072 | |
Loss on extinguishment of debt | 19,940 | 0 | 0 | |
Unrealized loss (gain) on investments | 2,475 | (2,279) | (1,974) | |
Deferred income tax benefit | (740) | (13,532) | (23,254) | |
Other | 919 | 0 | 0 | |
Effect of changes in operating assets and liabilities: | ||||
Accounts receivable | 32,683 | (46,480) | 58,275 | |
Finished goods inventories | (106,763) | (52,914) | (8,063) | |
Prepaid expenses and other assets | [1] | 14,897 | 20,665 | 9,547 |
Accounts payable and other liabilities | [1] | (228,601) | (101,110) | 268,130 |
Net cash provided by operating activities | 88,361 | 268,258 | 588,494 | |
Cash flows from investing activities: | ||||
Capital expenditures | (40,364) | (37,442) | (32,871) | |
Proceeds from sale of investments | [2] | 0 | 5,000 | 1,400 |
Net cash used in investing activities | (40,364) | (32,442) | (31,471) | |
Cash flows from financing activities: | ||||
Proceeds from senior notes due 2025 | 0 | 0 | 500,000 | |
Payment of senior notes due 2025 | (500,000) | 0 | 0 | |
Premiums paid to extinguish debt | (15,678) | 0 | 0 | |
Payments of debt issuance costs | (2,420) | (223) | (7,639) | |
Borrowings under secured revolving credit facility | 240,000 | 0 | 644,000 | |
Payments on secured revolving credit facility | (120,000) | 0 | (744,000) | |
Repurchases of common stock | (299,667) | (299,339) | (45,255) | |
Dividends paid | (118,113) | (60,124) | (26,260) | |
Withholdings from vesting of restricted stock | (6,930) | (4,019) | (5,011) | |
Proceeds from exercise of stock options | 4,457 | 10,995 | 9,008 | |
Other | (919) | 0 | 0 | |
Net cash (used in) provided by financing activities | (819,270) | (352,710) | 324,843 | |
Net effect of exchange rate changes on cash and cash equivalents | (1,273) | (1,135) | 6,146 | |
Net (decrease) increase in cash and cash equivalents | (772,546) | (118,029) | 888,012 | |
Cash and cash equivalents, beginning of fiscal year | 984,294 | 1,102,323 | 214,311 | |
Cash and cash equivalents, end of fiscal year | $ 211,748 | $ 984,294 | $ 1,102,323 | |
[1]Cash flows for the fiscal year ended January 1, 2022 and January 2, 2021 were revised to reflect the presentation for payments of rent before payment due date of $13.8 million and $18.1 million, respectively.[2]Cash flows for the fiscal year ended January 2, 2021 were revised to reflect the reclassification of $1.4 million proceeds from sale of investments from cash flows from operating activities to cash flows from investing activities. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated other comprehensive (loss) income | Retained earnings |
Beginning balance at Dec. 28, 2019 | $ 880,130 | $ 440 | $ 0 | $ (35,634) | $ 915,324 |
Beginning balance (in shares) at Dec. 28, 2019 | 43,963,103 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 193,645 | ||||
Exercise of stock options | 9,008 | $ 2 | 9,006 | 0 | 0 |
Withholdings from vesting of restricted stock (in shares) | (47,337) | ||||
Withholdings from vesting of restricted stock | (5,011) | $ 0 | (5,011) | 0 | 0 |
Restricted stock activity (in shares) | 145,348 | ||||
Restricted stock activity | 0 | $ 1 | (1) | 0 | 0 |
Stock-based compensation expense | 12,830 | $ 0 | 12,830 | 0 | 0 |
Repurchase of common stock (in shares) | (474,684) | ||||
Repurchases of common stock | (45,255) | $ (5) | 928 | 0 | (46,178) |
Cash dividends declared and paid | (26,260) | 0 | 0 | 0 | (26,260) |
Comprehensive income | 112,591 | $ 0 | 0 | 2,874 | |
Net income (loss) | 109,717 | 109,717 | |||
Ending balance (in shares) at Jan. 02, 2021 | 43,780,075 | ||||
Ending balance at Jan. 02, 2021 | 938,033 | $ 438 | 17,752 | (32,760) | 952,603 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 178,803 | ||||
Exercise of stock options | 10,995 | $ 1 | 10,994 | 0 | 0 |
Withholdings from vesting of restricted stock (in shares) | (41,523) | ||||
Withholdings from vesting of restricted stock | (4,019) | $ 0 | (4,019) | 0 | 0 |
Restricted stock activity (in shares) | 199,134 | ||||
Restricted stock activity | 0 | $ 2 | (2) | 0 | 0 |
Stock-based compensation expense | 21,029 | $ 0 | 21,029 | 0 | 0 |
Repurchase of common stock (in shares) | (2,967,619) | ||||
Repurchases of common stock | (299,339) | $ (30) | (45,754) | 0 | (253,555) |
Cash dividends declared and paid | (60,124) | 0 | 0 | 0 | (60,124) |
Comprehensive income | 343,611 | $ 0 | 0 | 3,863 | |
Net income (loss) | $ 339,748 | 339,748 | |||
Ending balance (in shares) at Jan. 01, 2022 | 41,148,870 | 41,148,870 | |||
Ending balance at Jan. 01, 2022 | $ 950,186 | $ 411 | 0 | (28,897) | 978,672 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 76,550 | 76,550 | |||
Exercise of stock options | $ 4,457 | $ 0 | 4,457 | 0 | 0 |
Withholdings from vesting of restricted stock (in shares) | (74,307) | ||||
Withholdings from vesting of restricted stock | (6,930) | $ 0 | (6,930) | 0 | 0 |
Restricted stock activity (in shares) | 288,206 | ||||
Restricted stock activity | 0 | $ 3 | (3) | 0 | 0 |
Stock-based compensation expense | 21,879 | $ 0 | 21,879 | 0 | 0 |
Repurchase of common stock (in shares) | (3,747,187) | ||||
Repurchases of common stock | (299,667) | $ (37) | (19,403) | 0 | (280,227) |
Cash dividends declared and paid | (118,113) | 0 | 0 | 0 | (118,113) |
Comprehensive income | 244,597 | $ 0 | 0 | (5,441) | |
Net income (loss) | $ 250,038 | 250,038 | |||
Ending balance (in shares) at Dec. 31, 2022 | 37,692,132 | 37,692,132 | |||
Ending balance at Dec. 31, 2022 | $ 796,409 | $ 377 | $ 0 | $ (34,338) | $ 830,370 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 USD ($) | ||
Statement of Cash Flows [Abstract] | ||
Reclassification of prepaid expenses | $ 18,100 | |
Reclassification of proceeds from sale of investments | $ 1,400 | [1] |
[1]Cash flows for the fiscal year ended January 2, 2021 were revised to reflect the reclassification of $1.4 million proceeds from sale of investments from cash flows from operating activities to cash flows from investing activities. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Jan. 01, 2022 | Oct. 02, 2021 | Jul. 03, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||||||||
Dividend declared and paid per common share (in USD per share) | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.60 | $ 0.40 | $ 0.40 | $ 3 | $ 1.40 | $ 0.60 |
THE COMPANY
THE COMPANY | 12 Months Ended |
Dec. 31, 2022 | |
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 B’gosh (or “ OshKosh ”), Skip Hop, Child of Mine , Just One You , Simple Joys, Little Planet, |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Carter’s, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Fiscal Year The Company’s fiscal year ends on the Saturday in December or January nearest December 31. Every five or six years, our fiscal year includes an additional 53 rd week of results. Fiscal 2022, which ended on December 31, 2022, contained 52 weeks. Fiscal 2021, which ended on January 1, 2022, contained 52 weeks. Fiscal 2020, which ended on January 2, 2021, contained 53 weeks. Certain expenses increased in relationship to the additional revenue from the 53 rd week, while other expenses, such as fixed costs and expenses incurred on a calendar-month basis, did not increase. The consolidated gross margin for the additional revenue from the 53 rd week of fiscal 2020 was slightly lower than the consolidated gross margin for fiscal 2022 and fiscal 2021 due to increased promotional activity during the 53 rd week. Use of Estimates in the Preparation of the Consolidated Financial Statements The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Foreign Currency Translation and Transactions Translation Adjustments The functional currency of substantially all of the Company’s foreign operations is the local currency in each foreign country. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the average exchange rates for the period. The resulting translation adjustments are recorded as a component of Accumulated other comprehensive income (loss) within the accompanying consolidated balance sheets. Transaction Adjustments The Company also recognizes gains and losses on transactions that are denominated in a currency other than the respective entity’s functional currency. Foreign currency transaction gains and losses also include the impact of intercompany loans with foreign subsidiaries. Foreign currency transaction gains and losses are recognized in earnings, as a separate component of Other expense (income), net, within the consolidated statements of operations. Foreign currency transaction gains and losses related to intercompany loans with foreign subsidiaries that are of a long-term nature are accounted for as translation adjustments and are included in Accumulated other comprehensive income (loss) within the accompanying consolidated balance sheets. Cash and Cash Equivalents The Company considers all highly liquid investments that have original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts and cash management funds invested in U.S. government instruments. These investments are stated at cost, which approximates fair value. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions; these amounts typically settle in less than five days. Money market funds held in a rabbi trust that are being used as investments to satisfy the Company’s obligations under its deferred compensation plans are treated as investments and recorded in Other assets on the accompanying consolidated balance sheets. Concentration of Cash Deposits Risk As of December 31, 2022, the Company had approximately $211.7 million of cash and cash equivalents in major financial institutions, including approximately $44.1 million in financial institutions located outside of the United States. The Company maintains cash deposits with major financial institutions that exceed the insurance coverage limits provided by the Federal Deposit Insurance Corporation in the U.S. and by similar insurers for deposits located outside the U.S. To mitigate this risk, the Company utilizes a policy of allocating cash deposits among major financial institutions that have been evaluated by the Company and third-party rating agencies as having acceptable risk profiles. Accounts Receivable Concentration of Credit Risk In fiscal 2022, 2021, and 2020, no one customer accounted for 10% or more of the Company’s consolidated net sales. At December 31, 2022, three wholesale customers each had individual receivable balances in excess of 10% of gross accounts receivable, and the total receivable balances due from these three wholesale customers in the aggregate equaled approximately 56% of total gross trade receivables outstanding. At January 1, 2022, three wholesale customers each had individual receivable balances in excess of 10% of gross accounts receivable, and the total receivable balances due from these three wholesale customers in the aggregate equaled approximately 52% of total gross trade receivables outstanding. Valuation Accounts for Wholesale Accounts Receivable Accounts Receivable Reserves The Company’s accounts receivable reserves for wholesale customers include an allowance for expected credit losses and an allowance for chargebacks. The allowance for expected credit losses includes estimated losses resulting from the inability of our customers to make payments. If the financial condition of a customer were to deteriorate, resulting in an impairment of its ability to make payments, an additional allowance could be required. Past due balances over 90 days are reviewed individually for collectability. The Company’s credit and collections department reviews all other balances regularly. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The allowance for chargebacks is based on historical experience and includes estimated losses resulting from pricing adjustments, short shipments, handling charges, returns, and freight. Provisions for the allowance for expected credit losses are reflected in Selling, general, and administrative (“SG&A”) expenses on the consolidated statement of operations and provisions for chargebacks are reflected as a reduction in Net sales on the consolidated statement of operations. Sales Returns Reserves Except in very limited instances, the Company does not allow its wholesale customers to return goods to the Company. Inventories Inventories, which consist primarily of finished goods, are stated approximately at the lower of cost (using first-in, first-out basis for wholesale inventory and average cost for retail inventory) or net realizable value. Costs of finished goods inventories include all costs incurred to bring inventory to its current condition, including inbound freight, duties, and other costs. Obsolete, damaged, and excess inventory is carried at net realizable value by establishing reserves after assessing method of cost determination, historical recovery rates, current market conditions, and future marketing and sales plans. Rebates, discounts, and other cash consideration received from a vendor related to inventory purchases are reflected as reductions in the cost of the related inventory item and are therefore reflected in cost of sales when the related inventory item is sold. Adjustments to bring inventory to net realizable value as a result of obsolete, damaged, and excess inventory increased $4.9 million, or 34.0%, to $19.3 million as of December 31, 2022. This increase is primarily due to the increase in inventory balances, longer holding periods for inventory, and increased “pack and hold” inventory. Leases The Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. Financial Presentation The Company determines if an arrangement is a lease at its inception. Operating leases are included in operating lease assets, current operating lease liabilities, and long-term operating lease liabilities in our consolidated balance sheets. Right of use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The operating lease ROU asset also includes initial direct costs and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. Certain of our lease agreements include variable rental payments based on a percentage of retail sales over contractual levels and others include variable rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Policy Elections Portfolio approach - In general, the Company accounts for the underlying leased asset and applies a discount rate at the lease level. However, there are certain non-real estate leases for which the Company utilizes the portfolio method by aggregating similar leased assets based on the underlying lease term. Non-lease component - The Company has lease agreements with lease and non-lease components. The Company has elected a policy to account for lease and non-lease components as a single component for all asset classes. Short-term lease - Leases with an initial term of 12 months or less are not recorded on the balance sheets. Discount rate - As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Renewal options - The Company evaluates the inclusion of renewal options on a lease by lease basis. In general, for leased retail real estate, the Company does not include renewal options in the underlying lease term. Property, Plant, and Equipment Property, plant, and equipment are stated at cost, less accumulated depreciation and amortization. When fixed assets are sold or otherwise disposed of, the accounts are relieved of the original cost of the assets and the related accumulated depreciation or amortization and any resulting gain or loss is credited or charged to income. For financial reporting purposes, depreciation and amortization are computed on the straight-line method over the estimated useful lives of the assets as follows: buildings and improvements from 15 to 26 years, retail store fixtures, equipment, and computers from 3 to 10 years. Leasehold improvements and fixed assets purchased under capital lease are amortized over the lesser of the asset life or related lease term. The Company capitalizes the cost of its fixtures designed and purchased for use at major wholesale accounts. The cost of these fixtures is amortized over 3 years. Internal-Use Software The Company purchases software licenses from external vendors and also develops software internally using Company employees and consultants. Software license costs, as well as development-stage costs for internally-developed software, are capitalized within Property, plant, and equipment, net on the consolidated balance sheets. All other costs, including preliminary project costs and post-implementation costs for internally-developed software, are expensed as incurred. Capitalized software is depreciated or amortized on the straight-line method over its estimated useful lives, from 3 to 10 years. If a software application does not include a purchased license for the software, such as a cloud-based software application, the arrangement is accounted for as a service contract. Implementation costs incurred in the development stage of such software applications are capitalized and reported in Prepaid expenses and other current assets on the consolidated balances sheets. All other costs, including preliminary project costs and post-implementation costs for these software applications, are expensed as incurred. Any capitalized costs are amortized over the term of the hosting arrangement, and the expense is presented in the same line item within the consolidated statements of operations as the expense for the service contract’s fees. Goodwill and Other Intangible Assets Annual Impairment Reviews The carrying values of the goodwill and indefinite-lived tradename assets are subject to annual impairment reviews which are performed as of the last day of each fiscal year. Additionally, a review for potential impairment is performed whenever significant events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. These impairment reviews are performed in accordance with ASC 350, “ Intangibles--Goodwill and Other” (“ASC 350”). Significant assumptions in the impairment models include estimates of revenue growth and profitability, terminal growth rates, discount rates, market multiples, an implied control premium, and, in the case of tradenames, royalty rates. Discount rates are dependent upon interest rates and the cost of capital at a point in time. Goodwill The Company performs impairment tests of its goodwill at the reporting unit level. Qualitative and quantitative methods are used to assess for impairment, including the use of discounted cash flows (“income approach”) and relevant data from guideline public companies (“market approach”). Under a qualitative assessment, the Company determines if it is “more likely than not” that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include but are not limited to: macroeconomic conditions, industry and market considerations, cost factors that may have a negative effect on earnings, overall financial performance, and other relevant entity-specific events. If the Company determines that it is “more likely than not” that the fair value of the reporting unit is less than its carrying value, then a goodwill impairment test using quantitative assessments must be performed. If it is determined that it is “not more likely than not” that the fair value of the reporting unit is less than its carrying value, then no further testing is required and the Company documents the relevant qualitative factors that support the strength in the fair value. Under a quantitative assessment for goodwill, the Company compares the fair value of a reporting unit to its carrying value, including goodwill. The Company uses a 50% weighting of the income approach and a 50% weighting of the market approach to determine the fair value of a reporting unit. The assumptions used in these approaches include revenue growth and profitability, terminal growth rates, discount rates, market multiples and an implied control premium. These assumptions are consistent with those of hypothetical marketplace participants. An impairment is recorded for any excess carrying value above the fair value of the reporting unit, not to exceed the carrying value of goodwill. Due to increased discount rates, decreased actual and projected sales and profitability, and the announcement of the substantial doubt of a Skip Hop wholesale customer to continue as a going concern in the first quarter of fiscal 2023, the Company performed a quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets as of December 31, 2022. Based upon this assessment, there were no impairments on the value of goodwill. Indefinite-lived Tradenames For indefinite-lived tradenames, the Company may utilize a qualitative assessment, as described above, to determine whether the fair value of an indefinite-lived asset is less than its carrying value. If a quantitative assessment is necessary, the Company determines fair value using the relief-from-royalty valuation method, which examines the hypothetical cost savings that accrue as a result of not having to license the tradename from another owner. The relief-from-royalty valuation method involves two steps: (1) estimation of reasonable royalty rates for the tradename assets and (2) the application of these royalty rates to a forecasted net revenue stream and discounting the resulting cash flows to determine a fair value. If the carrying amount exceeds the fair value of the tradename, an impairment charge is recognized in the amount of the excess. As discussed above, the Company performed quantitative impairment assessments on the value of the Company’s indefinite-lived intangible tradename assets as of December 31, 2022. Based upon this assessment, a non-cash pre-tax impairment charge of $9.0 million was recorded during the fourth quarter of fiscal 2022 on our indefinite-lived Skip Hop tradename asset. The charge recorded on our indefinite-lived Skip Hop tradename asset included charges of $5.6 million, $3.0 million, and $0.4 million 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. The carrying value of the Company’s indefinite-lived Skip Hop tradename asset as of December 31, 2022 was $6.0 million. Impairment of Other Long-Lived Assets The Company reviews other long-lived assets, including lease assets, property, plant, and equipment, definite-lived tradename assets, and customer relationship assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such an asset may not be recoverable. Management will determine whether there has been a permanent impairment on such assets held for use by comparing anticipated undiscounted future cash flows from the use and eventual disposition of the asset or asset group to the carrying value of the asset. The amount of any resulting impairment will be calculated by comparing the carrying value to fair value, which may be estimated using the present value of the same cash flows. Long-lived assets that meet the definition of held for sale will be valued at the lower of carrying amount or fair value, less costs to sell. There were no impairments to other long-lived assets in fiscal 2022. Deferred Debt Issuance Costs Debt issuance costs associated with the Company’s secured revolving credit facility and senior notes are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company’s senior notes are presented on the Company’s consolidated balance sheet as a direct reduction in the carrying value of the associated debt liability. Fees paid to lenders by the Company to obtain its secured revolving credit facility are included within Other assets on the Company’s consolidated balance sheets and classified as either current or non-current based on the expiration date of the credit facility. Fair Value Measurements The fair value framework requires the Company to categorize certain assets and liabilities into three levels, based upon the assumptions used to price those assets or liabilities. The three levels are defined as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. The Company measures its pension assets, deferred compensation plan investment assets, and any unsettled foreign currency forward contracts at fair value. T he Company’s cash and cash equivalents, accounts receivable, and accounts payable are short-term in nature. As such, their carrying value approximates fair value. The carrying values of the Company’s outstanding borrowings are not required to be remeasured and adjusted to the then-current fair values at the end of each reporting period. Instead, the fair values of the Company’s outstanding borrowings are disclosed at the end of each reporting period in Note 15, Fair Value Measurements , to the consolidated financial statements. Had the Company been required to remeasure and adjust the carrying values of its outstanding borrowings to fair value at the end of each reporting period, such fair value measurements would have been disclosed as a Level 2 liability in the fair value hierarchy. Revenue Recognition In accordance with ASC 606, “ Revenue from Contracts with Customers” , 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 when (or as) the performance obligations are satisfied. Performance Obligations The Company identifies each distinct performance obligation to transfer goods (or bundle of goods). Revenue transactions associated with the sale of products to customers through wholesale and international channels and to retail customers that are not a member of the My Rewarding Moments loyalty program comprise of a single performance obligation. Revenue transactions associated with the sale of products to retail customers that are a member of the My Rewarding Moments loyalty program comprise of two performance obligations: the transfer of control of the goods to the customer and the option for members to earn loyalty points that accumulate towards earning reward certificates. 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 has a single performance obligation in its wholesale arrangements, including replenishment orders. The Company typically satisfies its performance obligation when it transfers control of the goods to the customer 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. To ensure proper timing of revenue recognition, the Company defers the recognition of revenue for shipments that originated at the end of the reporting period in which the Company retains the risk of loss during shipment. “Pack and hold” inventories are not yet associated with any purchase order or purchase commitment. Therefore, these inventories are treated consistently with the rest of our wholesale inventory, and no deferral of revenue has been recognized. 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. For purchases made through the Company’s eCommerce channel, revenue is recognized when the goods are physically delivered to the customer. To ensure proper timing of revenue recognition, the Company defers the recognition of revenue for eCommerce channel shipments that originated at the end of the reporting period. Loyalty Program - U.S. retail customers can earn loyalty points that accumulate towards earning reward certificates that are redeemable for a specified amount off of future purchases. Loyalty points expire six months from the day they were earned, and reward certificates expire 45 days after issuance. Points and reward certificates earned by retail customers under My Rewarding Moments , the Company’s loyalty program, represent a separate performance obligation. For transactions where a customer earns loyalty points, the Company allocates revenue between the goods sold and the loyalty points expected to be earned towards a reward certificate based upon the relative standalone selling price. The revenue that is deferred is recorded within Other current liabilities on the Company’s consolidated balance sheets and then recognized as revenue upon redemption of the reward certificate. Loyalty program breakage is recognized as revenue based on the customer redemption pattern. Gift Cards - Customer purchases of gift cards are not recognized as revenue until the gift card is redeemed. The revenue that is deferred is recorded within Other current liabilities on the Company’s consolidated balance sheets. Gifts cards do not have an expiration date however, gift card breakage is recognized as revenue based upon the historical customer redemption pattern. Royalty Revenues - The Company has a single performance obligation in its licensing agreements with domestic and international licensees: to grant licensees the right to access certain trademarks in return for royalty payments or licensing fees. The Company satisfies its performance obligations with licensees over time as customers have the right to use the intellectual property over the contract period. Royalty revenues are included within Royalty income, net on the Company’s consolidated statements of operations. 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, which is generally sixty days or less. Returns and Refunds The Company establishes return provisions for retail customers in the period the sales occur. Return provisions are calculated based on historical return data and are recorded within Accounts receivable, net on the Company’s consolidated balance sheets. Except in very limited instances, the Company does not allow its wholesale customers to return goods to the Company. Significant Judgments Sale of Goods - The Company relies on shipping terms to determine when performance obligations are satisfied. The Company recognizes the revenue once control passes to the customer. When goods are shipped to wholesale customers “FOB Shipping Point,” control of the goods is transferred to the customer at the time of shipment. When goods are shipped to wholesale customers “FOB Destination,” control of the goods is transferred to the customer when the goods reach the customer. For most retail transactions in stores, no significant judgments are involved since revenue is recognized at the point of sale when tender is exchanged and the customer receives the goods. For retail transactions made through the Company's eCommerce channel, revenue is recognized when the goods are physically delivered to the customer. The Company recognizes revenue from omni-channel sales, including buy-on-line and pick-up in-store, buy-on-line, ship-to-store, and buy-on-line, deliver-from-store, when the product has been picked up by the customer at the store or when the product is physically delivered to the customer. 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. Additionally, the Company recognizes an allowance for chargebacks for wholesale customers that is based on historical experience and includes estimated losses resulting from pricing adjustments, short shipments, handling charges, returns, and freight. 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, including sales through our My Rewarding Moments loyalty program, 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. This approach is primarily used to estimate the redemption of loyalty points, loyalty point breakage, and gift card breakage. • 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 and are included in Cost of goods sold when the related revenues are recognized. • 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. Cooperative advertising arrangements reimburse customers for marketing activities for certain of our products. The Company records these reimbursements under cooperative advertising arrangements with certain of its major wholesale customers at fair value. Fair value is determined based upon, among other factors, comparable market analysis for similar advertisements. The Company has included the fair value of these arrangements of approximately $0.6 million for fiscal 2022, $0.2 million for fiscal 2021, and $0.5 million for fiscal 2020 as a component of SG&A expenses on the Company’s consolidated statements of operations, rather than as a reduction of Net sales. Amounts determined to be in excess of the fair value of these arrangements are recorded as a reduction of Net sales. For arrangements in which the Company does not receive a distinct good or service, we record these reimbursements as a reduction of net sales. The majority of the Company’s digital cooperative advertising arrangements are recorded as a reduction of net sales as there was no distinct good or service received by the Company. Costs of Goods Sold and Selling, General and Administrative Expenses In addition to the cost of product, cost of goods sold include changes to our inventory reserve and expenses related to the merchandising, design, and procurement of product, including inbound freight costs, purchasing and receiving costs, and inspection costs. Also included in costs of goods sold are the costs of shipping eCommerce product to end consumers. For omni-channel transactions, costs of goods sold include the costs of shipping product to end customers or to retail stores. Retail store occupancy costs, distribution expenses, and generally all expenses other than interest and income taxes are included in SG&A expenses. Distribution expenses that are included in SG&A primarily consist of payments to third-party shippers and handling costs to process product through our distribution facilities, including eCommerce fulfillment costs, and delivery to our wholesale customers and to our retail stores. Distribution expenses included in SG&A totaled $216.2 million, $206.6 million, and $190.7 million for fiscal years 2022, 2021, and 2020, respectively. Gross Profit Gross profit is calculated as consolidated net sales less cost of goods sold less adverse purchase commitments (inventory and raw materials), net. Gross margin is calculated as gross profit divided by consolidated net sales. Definitions of gross profit and gross margin vary across the industry and, as such, our metrics may not be co |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2022 | |
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 fiscal years presented were as follows: Fiscal year ended December 31, 2022 (52 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 1,080,471 $ 172,200 $ 1,252,671 Direct-to-consumer 1,680,159 — 279,903 1,960,062 $ 1,680,159 $ 1,080,471 $ 452,103 $ 3,212,733 Royalty income, net $ 8,815 $ 12,915 $ 4,090 $ 25,820 Fiscal year ended January 1, 2022 (52 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 1,126,415 $ 171,703 $ 1,298,118 Direct-to-consumer 1,899,262 — 289,060 2,188,322 $ 1,899,262 $ 1,126,415 $ 460,763 $ 3,486,440 Royalty income, net $ 8,541 $ 15,808 $ 4,332 $ 28,681 Fiscal year ended January 2, 2021 (53 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 996,088 $ 120,244 $ 1,116,332 Direct-to-consumer 1,671,644 — 236,358 1,908,002 $ 1,671,644 $ 996,088 $ 356,602 $ 3,024,334 Royalty income, net $ 8,732 $ 13,120 $ 4,424 $ 26,276 Accounts Receivable from Customers and Licensees The components of Accounts receivable, net, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Trade receivables from wholesale customers, net $ 195,078 $ 233,928 Royalties receivable, net 5,386 5,769 Other receivables (1) 14,571 10,352 Total receivables $ 215,035 $ 250,049 Less: Wholesale accounts receivable reserves (2)(3) (16,448) (18,695) Accounts receivable, net $ 198,587 $ 231,354 (1) Includes tenant allowances, tax, payroll, gift card and other receivables. (2) Includes allowance for chargebacks of $9.3 million and $11.4 million for the periods ended December 31, 2022 and January 1, 2022, respectively. (3) Includes allowance for credit losses of $7.2 million and $7.3 million for the periods ended December 31, 2022 and January 1, 2022, respectively. Information regarding Wholesale accounts receivable reserves is as follows: (dollars in thousands) Wholesale accounts receivable reserves Balance at December 28, 2019 $ 11,283 Additional provisions 9,625 Charges to reserve (1) (8,542) Balance at January 2, 2021 $ 12,366 Additional provisions 13,282 Charges to reserve (6,953) Balance at January 1, 2022 $ 18,695 Additional provisions 9,280 Charges to reserve (11,527) Balance at December 31, 2022 $ 16,448 (1) Charges to the reserve include total write-offs of $6.5 million related to the bankruptcy of customers during fiscal 2020. 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) December 31, 2022 January 1, 2022 Contract liabilities - current: Unredeemed gift cards $ 23,303 $ 21,619 Unredeemed customer loyalty rewards 5,276 5,659 Carter’s credit card - upfront bonus (1) 714 714 Total contract liabilities - current (2) $ 29,293 $ 27,992 Contract liabilities - non-current (3) $ 1,429 $ 2,143 Total contract liabilities $ 30,722 $ 30,135 (1) This amount reflects the current portion of the Carter’s credit card bonus to be recognized as revenue over the next twelve months. (2) Included within Other current liabilities on the Company’s consolidated balance sheet. (3) This amount reflects the non-current portion of the Carter’s credit card upfront bonus and is included within Other long-term 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 purchase of gift cards, 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 program represent obligations of the Company to transfer goods to the customer upon redemption. Periodic changes in the loyalty program contract liability result from new rewards earned, reward certificate redemptions and expirations. The earning and redemption cycles for our loyalty program are under one year in duration. Carter’s credit card - upfront bonus - the Company received an upfront bonus from a third-party financial institution, which will be recognized as revenue on a straight-line basis over the term of the agreement. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
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 3 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 the periods presented, the Company’s finance leases were not material to the consolidated balance sheets, consolidated statements of operations, or statement 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 fiscal periods indicated: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Operating lease cost $ 160,210 $ 166,481 $ 180,056 Variable lease cost (*) 66,400 64,410 71,971 Net lease cost $ 226,610 $ 230,891 $ 252,027 (*) Includes short-term leases, which are not material, and operating lease impairment charges. Supplemental balance sheet information related to leases was as follows: December 31, 2022 January 1, 2022 Weighted average remaining operating lease term (years) 4.7 4.9 Weighted average discount rate for operating leases 3.72% 3.26% Cash paid for amounts included in the measurement of operating lease liabilities in fiscal 2022 and fiscal 2021 was $172.9 million and $204.8 million, respectively. Operating lease assets obtained in exchange for operating lease liabilities in fiscal 2022 and fiscal 2021 were $144.9 million and $39.6 million, respectively. Operating lease assets obtained primarily consist of new or modified leases. As of December 31, 2022, the maturities of lease liabilities were as follows: (dollars in thousands) Operating leases 2023 $ 157,254 2024 151,059 2025 107,022 2026 73,533 2027 51,050 After 2027 80,640 Total lease payments $ 620,558 Less: Interest (56,385) Present value of lease liabilities (*) $ 564,173 (*) 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. As of December 31, 2022, the minimum rental commitments for additional operating lease contracts, primarily for retail stores, that have not yet commenced are $11.0 million. These operating leases will commence in fiscal year 2023 with lease terms of 10 years to 11 years. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment, net consists of the following: (dollars in thousands) December 31, 2022 January 1, 2022 Land, building, and leasehold improvements $ 332,971 $ 333,322 Fixtures, equipment, and computer hardware 281,830 280,022 Computer software 115,706 113,284 Construction in progress (*) 28,843 18,302 759,350 744,930 Accumulated depreciation and amortization (569,528) (528,926) Total $ 189,822 $ 216,004 (*) Increase relates primarily to retail store openings and remodels. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER 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 January 2, 2021 (*) $ 83,934 $ 74,454 $ 53,388 $ 211,776 Foreign currency impact — — 247 247 Balance at January 1, 2022 (*) $ 83,934 $ 74,454 $ 53,635 $ 212,023 Foreign currency impact — — (2,690) (2,690) Balance at December 31, 2022 (*) $ 83,934 $ 74,454 $ 50,945 $ 209,333 (*) Goodwill 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: December 31, 2022 January 1, 2022 (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 (1) Indefinite 6,000 — 6,000 15,000 — 15,000 Finite-life tradenames (2) 5 - 20 years 3,911 1,751 2,160 3,911 1,501 2,410 Total tradenames, net $ 300,144 $ 1,751 $ 298,393 $ 309,144 $ 1,501 $ 307,643 Skip Hop customer relationships 15 years $ 47,300 $ 18,187 $ 29,113 $ 47,300 $ 15,010 $ 32,290 Carter’s Mexico customer relationships 10 years 3,125 1,674 1,451 3,047 1,368 1,679 Total customer relationships, net $ 50,425 $ 19,861 $ 30,564 $ 50,347 $ 16,378 $ 33,969 (1) In fiscal 2022, impairment charges of $5.6 million, $3.0 million, and $0.4 million were 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. (2) Relates to the acquisition of rights to the Carter’s brand in Chile in December 2014 and the acquisition of the Skip Hop brand in February 2017. The carrying values of goodwill and indefinite-lived tradename assets are subject to annual impairment reviews as of the last day of each fiscal year. Between annual assessments, impairment reviews may also be triggered by any significant events or changes in circumstances affecting our business. These impairment reviews are performed in accordance with ASC 350, “ Intangibles--Goodwill and Other” (“ASC 350”). Due to increased discount rates, decreased actual and projected sales and profitability, and the announcement of the substantial doubt of a Skip Hop wholesale customer to continue as a going concern in the first quarter of fiscal 2023, the Company performed a quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets as of December 31, 2022. The goodwill impairment assessment for each reporting unit was performed in accordance with ASC 350 and compares the carrying value of each reporting unit to its fair value. Consistent with prior practice, the Company uses a 50% weighting of the income approach and a 50% weighting of the market approach to determine the fair value of a reporting unit. Based upon this assessment, there were no impairments on the value of goodwill. The indefinite-lived tradename asset assessments were performed in accordance with ASC 350 and were determined using a discounted cash flow analysis which examined the hypothetical cost savings that accrue as a result of not having to license the tradename from another owner. Based on these assessments, a non-cash pre-tax impairment charge of $9.0 million was recorded during the fourth quarter of fiscal 2022 on our indefinite-lived Skip Hop tradename asset. The charge recorded on our indefinite-lived Skip Hop tradename asset included charges of $5.6 million, $3.0 million, and $0.4 million 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. The carrying value of the Company’s indefinite-lived Skip Hop tradename asset as of December 31, 2022 was $6.0 million. Changes in the carrying values between comparative periods for goodwill related to the International segment were due to fluctuations in the foreign currency exchange rates between the Canadian and U.S. dollar that were used in the remeasurement process for preparing the Company’s consolidated financial statements. The changes in the carrying value of customer relationships for Carter’s Mexico, including the related accumulated amortization, that were not attributable to amortization expense was also impacted by foreign currency exchange rate fluctuations. Amortization expense for intangible assets subject to amortization was approximately $3.7 million for each of fiscal years 2022, 2021, and 2020. Amortization expense is included in SG&A expenses on the Company’s consolidated statements of operations The estimated amortization expense for the next five fiscal years is as follows: (dollars in thousands) Amortization expense 2023 $ 3,701 2024 $ 3,671 2025 $ 3,671 2026 $ 3,671 2027 $ 3,539 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The components of Accumulated other comprehensive (loss) income consisted of the following: (dollars in thousands) Pension liability adjustments Post-retirement liability adjustments Cumulative translation adjustments Accumulated other comprehensive (loss) income Balance at December 28, 2019 $ (10,696) $ 1,584 $ (26,522) $ (35,634) Fiscal year 2020 change (2,197) (144) 5,215 2,874 Balance at January 2, 2021 (12,893) 1,440 (21,307) (32,760) Fiscal year 2021 change 3,973 (115) 5 3,863 Balance at January 1, 2022 (8,920) 1,325 (21,302) (28,897) Fiscal year 2022 change 1,739 344 (7,524) (5,441) Balance at December 31, 2022 $ (7,181) $ 1,669 $ (28,826) $ (34,338) As of December 31, 2022 and January 1, 2022, the cumulative tax effect on the pension liability adjustments were $2.2 million and $2.8 million, respectively. As of December 31, 2022 and January 1, 2022, the cumulative tax effect on the post-retirement liability adjustments were approximately $0.5 million and $0.4 million, respectively. For the fiscal years ended December 31, 2022 and January 1, 2022, amounts reclassified from Accumulated other comprehensive loss to the consolidated statements of operations consisted of amortization of actuarial gains and losses related to the Company’s defined benefit retirement plans. Such amortization amounts are included in the net periodic cost or benefit recognized for these plans during the respective fiscal year. For additional information, see Note 11 , Employee Benefit Plans , to the consolidated financial statements. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: (dollars in thousands) December 31, 2022 January 1, 2022 $500 million, 5.500% Senior Notes due 2025 $ — $ 500,000 $500 million, 5.625% Senior Notes due 2027 500,000 500,000 Total senior notes $ 500,000 $ 1,000,000 Less: unamortized issuance-related costs for senior notes (3,376) (8,630) Senior notes, net $ 496,624 $ 991,370 Secured revolving credit facility 120,000 — Total long-term debt, net $ 616,624 $ 991,370 Secured Revolving Credit Facility As of December 31, 2022, the Company had $120.0 million outstanding borrowings under its secured revolving credit facility, exclusive of $3.5 million of outstanding letters of credit. As of January 1, 2022, the Company had no outstanding borrowings under its secured revolving credit facility, exclusive of $4.1 million of outstanding letters of credit. As of December 31, 2022 and January 1, 2022, there was approximately $726.5 million and $745.9 million available for future borrowing, respectively. All outstanding borrowings under the Company’s secured revolving credit facility are classified as non-current liabilities on the Company’s consolidated balance sheets due to contractual repayment terms under the credit facility. Terms of the Secured Revolving Credit Facility The Company’s revolving credit facility provides for an aggregate credit line of $850.0 million which includes a $750.0 million U.S. dollar facility and a $100.0 million multicurrency facility. The credit facility matures in April 2027. The facility contains covenants that restrict the Company’s ability to, among other things: (i) create or incur liens, debt, guarantees or other investments, (ii) engage in mergers and consolidations, (iii) pay dividends or other distributions to, and redemptions and repurchases from, equity holders, (iv) prepay, redeem or repurchase subordinated or junior debt, (v) amend organizational documents, and (vi) engage in certain transactions with affiliates. On May 4, 2020, the Company, through its wholly owned subsidiary, The William Carter Company (“TWCC”), entered into Amendment No. 2 to its fourth amended and restated credit agreement (“Amendment No. 2”). Amendment No. 2 provided for, among other things, access to additional capital and increased flexibility under financial maintenance covenants, which the Company sought in part due to the unforeseen negative effects of the COVID-19 pandemic. On April 21, 2021, the Company, through its wholly owned subsidiary, TWCC, entered into Amendment No. 3 to its fourth amended and restated credit agreement (“Amendment No. 3”). Amendment No. 3 provided for, among other things, an increase in the required minimum liquidity and the ability to make additional restricted payments, including to pay cash dividends and repurchase common stock, which the Company sought in part due to ease restrictions from Amendment No. 2. On April 11, 2022, the Company, through TWCC entered into Amendment No. 4 to its fourth amended and restated credit agreement (“Amendment No. 4”) that, among other things, increased the borrowing capacity of the secured revolving credit facility to $850.0 million (combined U.S. dollar and multicurrency facility borrowings), extended the maturity of the secured revolving credit facility from September 2023 to April 2027, and reduced the number of financial maintenance covenants from two to one. In particular, Amendment No. 4 provides for the following: ◦ increases the borrowing capacity of the secured revolving credit facility from $750 million to $850 million (the U.S. Dollar facility commitment increases to $750 million from $650 million and the multicurrency facility commitment remains at $100 million); ◦ extends the maturity of the secured revolving credit facility from September 2023 to April 2027; ◦ adds a Springing Maturity Date provision, which states that if the Company has not redeemed or refinanced at least $250 million of the senior notes due 2027 prior to the 91st day before the maturity of the senior notes due March 15, 2027, then the maturity date of the secured revolving credit facility will be the 91st day before the original maturity of the senior notes due 2027; ◦ reduces the number of financial maintenance covenants from two to one. The Lease Adjusted Leverage Ratio has been simplified to a Consolidated Total Leverage Ratio and the Consolidated Fixed Charge Coverage Ratio has been eliminated. The Consolidated Total Leverage Ratio maximum permitted shall be 3.50:1.00 and temporarily increases to 4.00:1:00 in the event of a Material Acquisition; ◦ Term Benchmark Loans bear interest at a rate determined by reference to the Adjusted Term SOFR (Secured Overnight Financing Rate), CDOR (Canadian Dollar Offered Rate), or the Adjusted EURIBOR (Euro Interbank Offered Rate). Each Term Benchmark Loan is subject to interest charges equal to the per annum respective benchmark rate plus an initial applicable rate of 1.375% which may be adjusted from 1.125% to 1.625% based upon a leverage-based pricing schedule; and ◦ Other Base, Prime, and Overnight Rate Loans are subject to interest charges equal to the per annum, respective, benchmark rate plus an initial applicable rate of 0.375% which may be adjusted from 0.125% to 0.625% based upon a leverage-based pricing schedule. An Applicable Commitment Fee initially equal to 0.20% per annum and ranging from 0.15% per annum to 0.25% per annum, based upon a leverage-based pricing grid, is payable quarterly in arrears with respect to the average daily unused portion of the revolving loan commitments. Capitalized items are Defined Terms pursuant to Amendment No. 4, dated as of April 11, 2022. Approximately $2.4 million, including both bank fees and other third-party expenses, has been capitalized in connection with Amendment No. 4 and is being amortized over the remaining term of the secured revolving credit facility. As of December 31, 2022, the interest rate margins applicable to the amended revolving credit facility were 1.375% for adjusted term SOFR rate loans and 0.375% for base rate loans. As of December 31, 2022, U.S. dollar borrowings outstanding under the secured revolving credit facility accrued interest at an adjusted term SOFR rate plus the applicable margin, which resulted in a weighted-average borrowing rate of 5.80%. There were no foreign currency borrowings outstanding on December 31, 2022 or January 1, 2022. As of December 31, 2022, the Company was in compliance with its financial and other covenants under the secured revolving credit facility. Senior Notes 2020 Issuance and 2022 Redemption of Senior Notes On May 11, 2020, the Company, through its wholly-owned subsidiary, TWCC, issued $500 million principal amount of senior notes at par, bearing interest at a rate of 5.500% per annum, and maturing on May 15, 2025. TWCC received net proceeds from the offering of the senior notes of approximately $494.5 million, after deducting underwriting fees, which TWCC used to repay borrowings outstanding under the Company’s secured revolving credit facility. Approximately $6.5 million, including both bank fees and other third-party expenses, has been capitalized in connection with the issuance and is being amortized over the term of the senior notes. On April 4, 2022, the Company, through its wholly-owned subsidiary, TWCC redeemed the $500 million principal amount of senior notes, bearing interest at a rate of 5.500% per annum, and originally maturing on May 15, 2025. Pursuant to the optional redemption provisions described in the Indenture dated as of May 11, 2020, TWCC paid the outstanding principal plus accrued interest and an Applicable Premium as defined in the Indenture. This debt redemption resulted in a loss on extinguishment of debt of approximately $19.9 million, primarily consisting of $15.7 million of the Applicable Premium and $4.3 million related to the write-off of unamortized debt issuance costs. Senior Notes due 2027 On March 14, 2019, TWCC issued $500 million principal amount of senior notes at par, bearing interest at a rate of 5.625% per annum, and maturing on March 15, 2027. On and after March 15, 2022, TWCC may redeem all or part of the senior notes at the redemption prices (expressed as percentages of principal amount of the senior notes to be redeemed) set forth below, plus accrued and unpaid interest. The redemption price is applicable when the redemption occurs during the twelve-month period beginning on March 15 of each of the years indicated is as follows: Year Percentage 2023 101.41 % 2024 and thereafter 100.00 % The senior notes mentioned above are unsecured and are fully and unconditionally guaranteed by Carter’s, Inc. and certain domestic subsidiaries of TWCC. The guarantor subsidiaries are 100% owned directly or indirectly by Carter’s, Inc. and all guarantees are joint, several and unconditional. The indenture governing the senior notes provides that upon the occurrence of specific kinds of changes of control, unless a redemption notice with respect to all the outstanding senior notes has previously or concurrently been mailed or delivered, TWCC will be required to make an offer to purchase the senior notes at 101% of their principal amount, plus accrued and unpaid interest to (but excluding) the date of purchase. The indenture governing the senior notes includes a number of covenants, that, among other things and subject to certain exceptions, restrict TWCC’s ability and the ability of certain of its subsidiaries to: (a) incur certain types of indebtedness that is secured by a lien; (b) enter into certain sale and leaseback transactions; and (c) consolidate or merge with or into, or sell substantially all of the issuer’s assets to, another person, under certain circumstances. Terms of the notes contain customary affirmative covenants and provide for events of default which, if certain of them occur, would permit the trustee or the holders of at least 25.0% in principal amount of the then total outstanding senior notes to declare all amounts owning under the notes to be due and payable. Carter’s, Inc. is not subject to these covenants. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2022 | |
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: For the fiscal year ended December 31, 2022 January 1, 2022 January 2, 2021 Number of shares repurchased 3,747,187 2,967,619 474,684 Aggregate cost of shares repurchased (dollars in thousands) $ 299,667 $ 299,339 $ 45,255 Average price per share $ 79.97 $ 100.87 $ 95.34 On February 24, 2022, the Company’s Board of Directors authorized share repurchases up to $1.00 billion, inclusive of $301.9 million remaining under previous authorizations. The total remaining capacity under outstanding repurchase authorizations as of December 31, 2022 was approximately $749.5 million, based on settled repurchase transactions. The share repurchase authorizations have no expiration dates. 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 at the discretion of the Company subject to restrictions under the Company’s revolving credit facility, market conditions, stock price, other investment priorities, excise taxes, and other factors. Dividends On February 23, 2023, the Company’s Board of Directors authorized a quarterly cash dividend payment of $0.75 per common share, payable on March 17, 2023 to shareholders of record at the close of business on March 7, 2023. In fiscal 2022, the Board of Directors declared and the Company paid quarterly cash dividends of $0.75 per common share during all four quarters. In fiscal 2021, the Board of Directors declared and the Company paid quarterly cash dividends of $0.40 per common share in each of the second and third quarters of fiscal 2021 and $0.60 per common share in the fourth quarter of fiscal 2021. As a result of actions taken in connection with the COVID-19 pandemic, the Board of Directors did not declare and the Company did not pay cash dividends for the first quarter of 2021. Our 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. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Under the Company’s Amended and Restated Equity Incentive Plan (the “Plan”), the Compensation Committee of the Board of Directors may award incentive stock options, stock appreciation rights, restricted stock, unrestricted stock, stock deliverable on a deferred basis (including restricted stock units), and performance-based stock awards. As of December 31, 2022, the maximum number of shares of stock available under the Plan was 18,778,392, and there were 2,623,055 remaining shares available for grant under the Plan. The Plan makes a provision for the treatment of awards upon termination of service or in the case of a merger or similar corporate transaction. Participation in the Plan is limited to members of the Company’s Board of Directors, executive officers and other key employees. The limit on shares available under the Plan, the individual limits, and other award terms are subject to adjustment to reflect stock splits or stock dividends, combinations, and certain other events. All stock options issued under the Plan expire no later than ten years from the date of grant. The Company believes that the current level of authorized shares is sufficient to satisfy future grants for the foreseeable future. The Company recorded stock-based compensation cost as follows: For the fiscal years ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Stock options $ 189 $ 1,347 $ 2,694 Restricted stock: Time-based awards 17,893 14,756 10,468 Performance-based awards 2,091 3,608 (1,927) Stock awards 1,706 1,318 1,595 Total $ 21,879 $ 21,029 $ 12,830 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 fiscal 2020, the achievement of performance target estimates was revised resulting in a reversal of previously recognized stock-based compensation expense for outstanding performance-based awards. Stock Options Stock options vest in equal annual installments over a four-year period. The Company issues new shares to satisfy stock option exercises. There were no stock options granted in fiscal 2022, 2021, and 2020. Changes in the Company’s stock options for the fiscal year ended December 31, 2022 were as follows: Number of shares Weighted- average exercise price Weighted-average remaining contractual terms (years) Aggregate intrinsic value Outstanding, January 1, 2022 658,666 $ 89.32 Granted (*) — $ — Exercised (76,550) $ 58.23 Forfeited — $ — Expired (19,068) $ 105.76 Outstanding, December 31, 2022 563,048 $ 92.99 3.63 $ 430 Vested and expected to vest, December 31, 2022 563,048 $ 92.99 3.63 $ 430 Exercisable, December 31, 2022 563,048 $ 92.99 3.63 $ 430 (*) The Company did not grant any stock options in fiscal 2022. The intrinsic value of stock options exercised during the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021 was approximately $1.4 million, $7.8 million, and $8.2 million, respectively. At December 31, 2022, there was no unrecognized compensation cost related to stock options based on the current estimates of the number of stock options that will vest. Restricted Stock Awards Restricted stock awards issued under the Plan vest based upon: 1) continued service (time-based) or 2) a combination of continued service and performance targets (performance-based). The following table summarizes activity related to all restricted stock awards during the fiscal year ended December 31, 2022: Restricted Weighted-average grant-date Outstanding, January 1, 2022 544,713 $ 98.33 Granted 342,110 $ 89.31 Vested (205,120) $ 95.54 Forfeited (52,017) $ 93.79 Outstanding, December 31, 2022 629,686 $ 94.71 During fiscal 2021, a total of 116,238 shares of restricted stock vested with a weighted-average fair value of $99.32 per share. During fiscal 2020, a total of 140,345 shares of restricted stock vested with a weighted-average fair value of $89.80 per share. At December 31, 2022, there was approximately $35.0 million of unrecognized compensation cost (net of estimated forfeitures) related to all restricted stock awards which is expected to be recognized over a weighted-average period of approximately 2.3 years. Time-based Restricted Stock Awards Time-based restricted stock awards vest in equal annual installments or cliff vest after a three-year or four-year period. During fiscal years 2022, 2021, and 2020, a total of 162,508 shares, 116,238 shares, and 125,209 shares, respectively, of time-based restricted stock vested with a weighted-average fair value of $97.29 per share, $99.32 per share, and $90.52 per share, respectively. At December 31, 2022, there was approximately $30.8 million of unrecognized compensation cost (net of estimated forfeitures) related to time-based restricted stock which is expected to be recognized over a weighted-average period of approximately 2.4 years. Performance-based Restricted Stock Awards Fiscal year Number of shares granted Weighted-average fair value per share 2020 58,320 $ 108.76 2021 (*) — $ — 2022 89,760 $ 91.12 (*) The Company did not grant any performance-based restricted stock awards in fiscal 2021. Performance-based restricted stock awards cliff vest after a three-year period, subject to the achievement of the performance target. During the fiscal year ended December 31, 2022, 42,612 performance shares vested. As of December 31, 2022, a total of 86,952 performance shares were unvested with a weighted-average fair value of $91.12 per share. Vesting of these 86,952 performance shares is based on the performance targets for the shares granted in fiscal 2022. As of December 31, 2022, there was $4.2 million unrecognized compensation cost (net of estimated forfeitures) related to the unvested performance-based restricted stock awards based which is expected to be recognized over a weighted-average period of approximately 2.1 years. 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. Stock Awards Included in restricted stock awards are grants to non-management members of the Company’s Board of Directors. At issuance, these awards were fully vested and issued as shares of the Company’s common stock. The Company records the stock-based compensation expense immediately as there are no vesting terms. During fiscal years 2022, 2021, and 2020, such awards were as follows: Fiscal year Number of shares issued Fair value per share Aggregate value 2020 21,362 $ 74.67 $ 1,595 2021 13,037 $ 101.09 $ 1,318 2022 21,725 $ 78.51 $ 1,706 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS The Company maintains defined contribution plans, a deferred compensation plan, and two defined benefit plans. The two defined benefit plans include the OshKosh B’Gosh pension plan and a post-retirement life and medical plan. OshKosh B’Gosh Pension Plan Funded Status The retirement benefits under the OshKosh B’Gosh pension plan were frozen as of December 31, 2005. A reconciliation of changes in the projected pension benefit obligation and plan assets is as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 70,875 $ 74,128 Interest cost 1,909 1,818 Actuarial gain (16,021) (2,405) Benefits paid (2,916) (2,666) Projected benefit obligation at end of year $ 53,847 $ 70,875 Change in plan assets: Fair value of plan assets at beginning of year $ 68,689 $ 65,417 Actual return on plan assets (10,528) 5,938 Benefits paid (2,916) (2,666) Fair value of plan assets at end of year $ 55,245 $ 68,689 (Funded) Unfunded status $ (1,398) $ 2,186 The accumulated benefit obligation is equal to the projected benefit obligation as of December 31, 2022 and January 1, 2022 because the plan is frozen. The Company does not expect to make any contributions to the OshKosh B’Gosh pension plan during fiscal 2023 as the plan’s funding exceeds the minimum funding requirements. The actuarial gain in fiscal 2022 and in fiscal 2021 was primarily attributable to increased discount rates. During fiscal 2022, given an increase in discount rates, the plan became fully funded on a GAAP basis. The funded status asset is included in Other assets in the Company’s consolidated balance sheet. Net Periodic Pension Cost and Changes Recognized in Other Comprehensive Income The components of net periodic pension cost recognized in the statement of operations and changes recognized in other comprehensive income were as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Recognized in the statement of operations: Interest cost $ 1,909 $ 1,818 $ 2,171 Expected return on plan assets (3,432) (3,577) (3,217) Amortization of net loss (*) 217 428 510 Net periodic pension benefit $ (1,306) $ (1,331) $ (536) Changes recognized in other comprehensive income: Net (gain) loss arising during the fiscal year $ (2,062) $ (4,765) $ 3,387 Amortization of net loss (*) (217) (428) (510) Total changes recognized in other comprehensive income $ (2,279) $ (5,193) $ 2,877 Total net periodic cost and changes recognized in other comprehensive income $ (3,585) $ (6,524) $ 2,341 (*) Represents pre-tax amounts reclassified from accumulated other comprehensive loss. For fiscal 2023, approximately $0.2 million is expected to be reclassified from accumulated other comprehensive loss to a component of net periodic pension cost. Assumptions The actuarial assumptions used in determining the benefit obligation and net periodic pension cost for our pension plan is presented in the following table: Benefit obligation 2022 2021 Discount rate 5.00% 2.75% Net periodic pension cost 2022 2021 2020 Discount rate 2.75% 2.50% 3.25% Expected long-term rate of return on plan assets 5.50% 6.00% 6.00% The discount rates used at December 31, 2022, January 1, 2022, and January 2, 2021 were determined with consideration given to the FTSE Pension Liability Index and the Bloomberg US Aggregate AA Bond Index, adjusted for the timing of expected plan distributions. The Company believes these indexes reflect a risk-free rate consistent with a portfolio of high quality debt instruments with maturities that are comparable to the timing of the expected payments under the plan. The expected long-term rate of return assumption is equal to the assumed discount rate. Refer to “Plan Assets” below in Note 11, Employee Benefit Plans for further discussion. The increased discount rate assumption at December 31, 2022 resulted in a decrease in the amount of the pension plan’s projected benefit obligation of approximately $16.0 million. A 0.25% change in the assumed discount rate as of December 31, 2022 would result in an increase or decrease in the amount of the pension plan's projected benefit obligation of approximately $1.5 million. The Company currently expects benefit payments for its defined benefit pension plans as follows for the next ten fiscal years: (dollars in thousands) 2023 $ 3,000 2024 $ 3,160 2025 $ 3,310 2026 $ 3,530 2027 $ 3,580 2028-2032 $ 19,510 Plan Assets As part of our funded status glide path, the Company has gradually reduced its equity exposure in its pension plan assets. During fiscal 2022, the plan became fully funded. As a result, investments shifted into fixed income securities. These fixed income securities include funds holding corporate bonds of companies from diverse industries and U.S. Treasuries. The expected long-term rate of return on plan assets is 5.00%. The fair value of the Company’s pension plan assets at December 31, 2022 and January 1, 2022, by asset category, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Asset category Total Level 1 Level 2 Total Level 1 Level 2 Cash and cash equivalents $ 2,204 $ 2,204 $ — $ 1,370 $ 1,370 $ — Equity securities: U.S. Large-Cap blend (1) — — — 7,508 7,508 — U.S. Large-Cap growth — — — 3,390 3,390 — U.S. Mid-Cap growth — — — 3,426 3,426 — U.S. Small-Cap blend — — — 2,054 2,054 — International blend — — — 8,200 8,200 — Fixed income securities: Corporate bonds (2) 53,041 52,805 236 39,970 39,746 224 Real estate (3) — — — 2,771 2,771 — $ 55,245 $ 55,009 $ 236 $ 68,689 $ 68,465 $ 224 (1) This category comprises low-cost equity index funds not actively managed that track the Standard & Poor’s 500 Index. (2) This category invests in both U.S. Treasuries and mid-term corporate debt from U.S. issuers from diverse industries. (3) This category represents an investment in a mutual fund that invests primarily in real estate securities, including common stocks, preferred stock and other equity securities issued by real estate companies. Post-retirement Life and Medical Plan Under a defined benefit plan frozen in 1991, the Company offers a comprehensive post-retirement medical plan to current and certain future retirees and their spouses. The Company also offers life insurance to current and certain future retirees. Employee contributions are required as a condition of participation for both medical benefits and life insurance and the Company’s liabilities are net of these expected employee contributions. Accumulated Post-Retirement Benefit Obligation The following is a reconciliation of the accumulated post-retirement benefit obligation (“APBO”) under this plan: For the fiscal years ended (dollars in thousands) December 31, 2022 January 1, 2022 APBO at beginning of fiscal year $ 2,662 $ 2,998 Service cost 14 15 Interest cost 63 57 Actuarial (gain) loss (763) (140) Plan participants’ contribution 15 20 Benefits paid (246) (288) APBO at end of fiscal year $ 1,745 $ 2,662 Approximately $1.5 million and $2.4 million of the APBO at the end of fiscal 2022 and 2021, respectively, were classified as Other long term liabilities in the Company’s consolidated balance sheets. Net Periodic Post-Retirement Benefit Cost and Changes Recognized in Other Comprehensive Income The components of net periodic post-retirement benefit cost recognized in the statement of operations and changes recognized in other comprehensive income were as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Recognized in the statement of operations: Service cost $ 14 $ 15 $ 25 Interest cost 63 57 94 Amortization of net gain (*) (320) (295) (345) Net periodic post-retirement benefit (income) cost $ (243) $ (223) $ (226) Changes recognized in other comprehensive income: Net (gain) loss arising during the fiscal year $ (763) $ (140) $ (162) Amortization of net gain (*) 320 295 345 Total changes recognized in other comprehensive income $ (443) $ 155 $ 183 Total net periodic post-retirement benefit (income) cost and changes recognized in other comprehensive income $ (686) $ (68) $ (43) (*) Represents pre-tax amounts reclassified from accumulated other comprehensive loss. For fiscal 2023, approximately $0.4 million is expected to be reclassified from accumulated other comprehensive loss to a component of net periodic post-retirement benefit cost. Assumptions The actuarial computations utilized the following assumptions, using year-end measurement dates: Post-retirement benefit obligation 2022 2021 Discount rate 4.75% 2.50% Net periodic post-retirement benefit cost 2022 2021 2020 Discount rate 2.50% 2.00% 3.00% The discount rates used at December 31, 2022, January 1, 2022, and January 2, 2021, were determined with primary consideration given to the FTSE Pension Discount Curve and Liability Index adjusted for the timing of expected plan distributions. The Company believes this index reflects a risk-free rate with maturities that are comparable to the timing of the expected payments under the plan. The effects on the Company’s plan of all future increases in health care costs are borne primarily by employees; accordingly, increasing medical costs are not expected to have any material effect on the Company’s future financial results. The Company’s contribution for these post-retirement benefit obligations was approximately $0.2 million for fiscal year 2022 and approximately $0.3 million for fiscal years 2021, and 2020. The Company expects that its contribution and benefit payments for post-retirement benefit obligations will be approximately $0.2 million for fiscal years 2023, 2024, 2025, 2026, and 2027. For the five years subsequent to fiscal 2027, the aggregate contributions and benefit payments for post-retirement benefit obligations is expected to be approximately $0.7 million. The Company does not pre-fund this plan and as a result there are no plan assets. Deferred Compensation Plan The Company maintains a deferred compensation plan allowing voluntary salary and incentive compensation deferrals for qualifying employees as permitted by the Internal Revenue Code. Participant deferrals earn investment returns based on a select number of investment options, including equity, debt, and real estate mutual funds. The Company invests comparable amounts in marketable securities to mitigate the risk associated with the investment return on the employee deferrals. Defined Contribution Plan The Company also sponsors defined contribution savings plans in the United States and Canada. The U.S. plan covers employees who are at least 21 years of age and have completed one one thousand hours |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Provision for Income Taxes The provision for income taxes consisted of the following: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Current tax provision: Federal $ 43,569 $ 75,408 $ 31,085 State 8,307 16,905 6,331 Foreign 15,562 19,761 11,105 Total current provision $ 67,438 $ 112,074 $ 48,521 Deferred tax provision (benefit): Federal $ (1,484) $ (10,541) $ (18,449) State 425 (2,428) (3,741) Foreign 319 (563) (1,064) Total deferred provision (740) (13,532) (23,254) Total provision $ 66,698 $ 98,542 $ 25,267 The foreign portion of the tax position substantially relates to the Company’s international operations in Canada, Hong Kong and Mexico, in addition to foreign tax withholdings related to the Company’s foreign royalty income. The Company plans to repatriate undistributed earnings from Hong Kong and has provided for deferred income taxes related to these earnings. Since the current U.S. tax regime taxes foreign earnings in the year earned, taxes associated with repatriation are not material. Deferred income taxes have not been provided for undistributed foreign earnings from Canada or Mexico, or any additional outside basis difference inherent in all foreign entities, as these amounts continue to be indefinitely reinvested in foreign operations. Total undistributed earnings from the Company’s subsidiaries in Canada and Mexico amounted to approximately $97.3 million. Unrecognized deferred tax liability related to undistributed earnings from the Company’s subsidiaries in Canada and Mexico is estimated to be approximately $4.1 million, based on applicable withholding taxes, levels of foreign income previously taxed in the U.S. and applicable foreign tax credit limitations. The company accounts for the additional U.S. income tax on its foreign earnings under Global Intangible Low-Taxed Income (“GILTI”) as a period expense in the period in which additional tax is due. The components of income before income taxes were as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Domestic $ 227,929 $ 333,900 $ 73,525 Foreign 88,807 104,390 61,459 Total $ 316,736 $ 438,290 $ 134,984 Effective Rate Reconciliation The difference between the Company’s effective income tax rate and the federal statutory tax rate is reconciled below: For the fiscal year ended December 31, 2022 January 1, 2022 January 2, 2021 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal income tax benefit 2.8 % 3.0 % 2.7 % Impact of foreign operations (2.0) % (1.8) % (4.8) % Settlement of uncertain tax positions (0.7) % (0.3) % (1.3) % Benefit from stock-based compensation (0.1) % (0.3) % (1.1) % Goodwill impairments and other 0.1 % 0.9 % 2.2 % Total 21.1 % 22.5 % 18.7 % The Company and its subsidiaries file a consolidated United States federal income tax return, as well as separate and combined income tax returns in numerous state and foreign jurisdictions. In most cases, the Company is no longer subject to U.S. tax authority examinations for years prior to fiscal 2019. Deferred Taxes The following table reflects the Company’s calculation of the components of deferred tax assets and liabilities as of December 31, 2022 and January 1, 2022. (dollars in thousands) December 31, 2022 January 1, 2022 Deferred tax assets: Assets (Liabilities) Accounts receivable allowance $ 6,715 $ 7,026 Inventory 16,902 11,923 Accrued liabilities 8,230 22,226 Equity-based compensation 4,397 3,410 Deferred employee benefits 3,247 5,144 Leasing liabilities 83,886 97,269 Other 3,724 3,845 Total deferred tax assets 127,101 150,843 Deferred tax liabilities: Depreciation (18,560) (26,472) Leasing assets (72,162) (80,818) Tradename and licensing agreements (73,534) (76,275) Other (1,614) (5,388) Total deferred tax liabilities (165,870) (188,953) Net deferred tax liability $ (38,769) $ (38,110) Amounts recognized in the consolidated balance sheets: (dollars in thousands) December 31, 2022 January 1, 2022 Assets (Liabilities) Deferred tax assets $ 2,466 $ 2,800 Deferred tax liabilities (41,235) (40,910) Net deferred tax liability $ (38,769) $ (38,110) Uncertain Tax Positions The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits: (dollars in thousands) Balance at December 28, 2019 $ 13,923 Additions based on tax positions related to fiscal 2020 760 Reductions for prior year tax positions (104) Reductions for lapse of statute of limitations (2,056) Balance at January 2, 2021 $ 12,523 Additions based on tax positions related to fiscal 2021 810 Reductions for prior year tax positions (2,207) Reductions for lapse of statute of limitations (2,270) Balance at January 1, 2022 $ 8,856 Additions based on tax positions related to fiscal 2022 1,040 Reductions for prior year tax positions — Reductions for lapse of statute of limitations (2,803) Balance at December 31, 2022 $ 7,093 As of December 31, 2022, the Company had gross unrecognized tax benefits of approximately $7.1 million, of which $6.2 million, if ultimately recognized, will affect the Company’s effective tax rate in the period 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. Because of deferred tax accounting, changes in the timing of these deductions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authorities. Included in the reserves for unrecognized tax benefits are 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 tax rate for fiscal 2023 and the effective tax rate in the quarter in which the benefits are recognized. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
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: For the fiscal year ended December 31, 2022 January 1, 2022 January 2, 2021 (52 weeks) (52 weeks) (53 weeks) Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 38,822,737 42,853,009 43,242,967 Dilutive effect of equity awards 27,908 149,619 164,754 Diluted number of common and common equivalent shares outstanding 38,850,645 43,002,628 43,407,721 Earnings per share: (dollars in thousands, except per share data) Basic net income per common share: Net income $ 250,038 $ 339,748 $ 109,717 Income allocated to participating securities (3,714) (4,113) (1,118) Net income available to common shareholders $ 246,324 $ 335,635 $ 108,599 Basic net income per common share $ 6.34 $ 7.83 $ 2.51 Diluted net income per common share: Net income $ 250,038 $ 339,748 $ 109,717 Income allocated to participating securities (3,712) (4,102) (1,115) Net income available to common shareholders $ 246,326 $ 335,646 $ 108,602 Diluted net income per common share $ 6.34 $ 7.81 $ 2.50 Anti-dilutive shares excluded from dilutive earnings per share calculations (1) 526,618 176,475 564,131 (1) The volume of antidilutive shares is, in part, due to the related unamortized compensation costs. The Company grants shares of its common stock in the form of restricted stock awards to certain key employees under the Company’s Amended and Restated Equity Incentive Plan (see Note 10, Stock-based Compensation , to the consolidated financial statements). Prior to vesting of the restricted stock awards, the grant recipients are entitled to receive non-forfeitable cash dividends if the Company declares and pays dividends on the Company’s common stock. Accordingly, unvested shares of the Company’s restricted stock awards are deemed to be participating securities for purposes of computing diluted earnings per share (EPS), and therefore the Company’s diluted EPS represents the lower of the amounts calculated under the treasury stock method or the two-class method of calculating diluted EPS. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company reports segment information based upon a “management approach.” The management approach refers to the internal reporting that is used by management for making operating decisions and assessing the performance of the Company’s reportable segments. The Company reports its corporate expenses separately as they are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of its reportable segments. Segment results include the direct costs of each segment and all other costs are allocated based upon detailed estimates and analysis of actual time and expenses incurred to support the operations of each segment or units produced or sourced to support each segment’s revenue. Certain costs, including incentive compensation for certain employees, and various other general corporate costs that are not specifically allocable to segments, are included in corporate expenses below. Intersegment sales and transfers are recorded at cost and are treated as a transfer of inventory. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segment assets are not presented. The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements. The table below presents certain segment information for our reportable segments and unallocated corporate expenses for the periods indicated: For the fiscal year ended (dollars in thousands) December 31, 2022 % of January 1, 2022 % of Consolidated Net Sales January 2, 2021 % of Consolidated Net Sales Net sales : U.S. Retail $ 1,680,159 52.3 % $ 1,899,262 54.5 % $ 1,671,644 55.3 % U.S. Wholesale 1,080,471 33.6 % 1,126,415 32.3 % 996,088 32.9 % International 452,103 14.1 % 460,763 13.2 % 356,602 11.8 % Total consolidated net sales $ 3,212,733 100.0 % $ 3,486,440 100.0 % $ 3,024,334 100.0 % Operating income (loss): % of % of % of U.S. Retail $ 252,497 15.0 % $ 368,221 19.4 % $ 146,806 8.8 % U.S. Wholesale 161,659 15.0 % 195,369 17.3 % 141,456 14.2 % International 56,617 12.5 % 63,806 13.8 % (1,224) (0.3) % Unallocated corporate (*) (91,602) n/a (130,317) n/a (97,169) n/a Total operating income $ 379,171 11.8 % $ 497,079 14.3 % $ 189,869 6.3 % (*) Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation. The tables below present additional segment information for our reportable segments for the periods presented: (dollars in millions) December 31, 2022 Charges: U.S. Retail U.S. Wholesale International Skip Hop tradename impairment charge $ 0.4 $ 5.6 $ 3.0 (dollars in millions) January 1, 2022 January 2, 2021 Charges: U.S. Retail U.S. Wholesale International U.S. Retail U.S. Wholesale International Organizational restructuring (1) $ (0.6) $ 0.1 $ 2.3 $ 5.0 $ 2.0 $ 2.2 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 2.0 1.7 0.2 9.6 9.6 2.2 Retail store operating leases and other long-lived asset impairments, net of gain (2) (2.6) — — 7.4 — 0.3 Total charges (3) $ (1.2) $ 1.8 $ 2.5 $ 36.1 $ 20.0 $ 26.4 (1) The fiscal year ended January 1, 2022 and the fiscal year ended January 2, 2021 also includes corporate charges related to organizational restructuring of $0.7 million and $7.4 million, respectively. (2) Related to gains on the modification of previously impaired retail store leases. (3) Total charges for the fiscal year ended January 1, 2022 exclude a customer bankruptcy recovery of $38,000. . Additional Data by Segment Significant expenses The table below represents Cost of goods sold by segment: For the fiscal year ended (dollars in thousands) December 31, 2022 % of January 1, 2022 % of Consolidated Net Sales January 2, 2021 % of Consolidated Net Sales Cost of goods sold : U.S. Retail $ 688,036 21.4 % $ 760,100 21.8 % $ 763,124 25.2 % U.S. Wholesale 798,370 24.9 % 825,770 23.7 % 729,425 24.1 % International 249,504 7.8 % 246,175 7.1 % 203,675 6.7 % Total cost of goods sold $ 1,735,910 54.0 % $ 1,832,045 52.5 % $ 1,696,224 56.1 % Note: Percentages may not be additive due to rounding. The table below represents SG&A expenses by segment: For the fiscal year ended (dollars in thousands) December 31, 2022 % of January 1, 2022 % of Consolidated Net Sales January 2, 2021 % of Consolidated Net Sales SG&A expenses : U.S. Retail $ 746,575 23.2 % $ 779,482 22.4 % $ 750,970 24.8 % U.S. Wholesale 125,173 3.9 % 127,826 3.7 % 122,555 4.1 % International 146,657 4.6 % 156,251 4.5 % 134,913 4.5 % Corporate 91,602 n/a 130,317 n/a 97,169 n/a Total SG&A expenses $ 1,110,007 34.6 % $ 1,193,876 34.2 % $ 1,105,607 36.6 % Inventory The table below represents inventory by segment: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 U.S. Wholesale (*) $ 580,918 $ 513,702 U.S. Retail 57,518 50,563 International 106,137 83,477 Total $ 744,573 $ 647,742 (*) U.S. Wholesale inventories also include inventory produced and warehoused for the U.S. Retail segment. The table below represents consolidated net sales by product: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Playclothes $ 1,125,352 $ 1,261,622 $ 1,052,178 Baby 1,103,023 1,124,961 1,026,910 Sleepwear 492,152 500,596 441,358 Other (*) 492,206 599,261 503,888 Total net sales $ 3,212,733 $ 3,486,440 $ 3,024,334 (*) Other product offerings include bedding, outerwear, swimwear, shoes, socks, diaper bags, gift sets, toys, and hair accessories. Geographical Data Revenue The Company’s international sales principally represent sales to customers in Canada. Such sales were 64.0%, 65.0%, and 70.3% of total international net sales in fiscal 2022, 2021, and 2020, respectively. Long-Lived Assets The following represents Property, plant, and equipment, net, and Operating lease assets by geographic area: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 United States $ 580,171 $ 613,111 International 101,986 90,641 Total $ 682,157 $ 703,752 Long-lived assets in the international segment primarily relate to Canada. Long-lived assets in Canada were 63.3% and 82.7% of total international long-lived assets at the end of fiscal 2022 and 2021, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
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 $15.1 million and $17.5 million at the end of fiscal 2022 and fiscal 2021, respectively. These investments are classified as Level 1 within the fair value hierarchy. The change in the aggregate fair values of marketable securities is due to the net activity of gains and losses and any contributions and distributions during the period. Losses on the investments in marketable securities were $2.5 million for fiscal 2022. Gains on the investments in marketable securities were $2.3 million for fiscal 2021. These amounts are included in Other expense (income), net on the Company’s consolidated statement of operations. The fair value of the Company’s pension plan assets at December 31, 2022 and January 1, 2022, by asset category, are disclosed in Note 11, Employee Benefits Plans , to the consolidated financial statements. Borrowings As of December 31, 2022, the Company had $120.0 million outstanding borrowings under its secured revolving credit facility. The fair value of the Company’s senior notes at December 31, 2022 was approximately $482.4 million. The fair value of these senior notes with a notional value and carrying value (gross of debt issuance costs) of $500.0 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. Goodwill, Intangible, and Long-Lived Tangible Assets Some assets are not measured at fair value on a recurring basis but are subject to fair value adjustments only in certain circumstances. These assets can include goodwill, indefinite-lived intangible assets, and long-lived tangible assets that have been reduced to fair value when impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Due to increased discount rates, decreased actual and projected sales and profitability, and the announcement of the substantial doubt of a Skip Hop wholesale customer to continue as a going concern in the first quarter of fiscal 2023, the Company performed a quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets as of December 31, 2022. The goodwill impairment assessment for each reporting unit was performed in accordance with ASC 350 and compares the carrying value of each reporting unit to its fair value. Consistent with prior practice, the Company uses a 50% weighting of the The indefinite-lived tradename asset assessments were performed in accordance with ASC 350 and were determined using a discounted cash flow analysis which examined the hypothetical cost savings that accrue as a result of not having to license the tradename from another owner. Based on these assessments, a non-cash pre-tax impairment charge of $9.0 million was recorded during the fourth quarter of fiscal 2022 on our indefinite-lived Skip Hop tradename asset. The charge recorded on our indefinite-lived Skip Hop tradename asset included charges of $5.6 million, $3.0 million, and $0.4 million 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. The carrying value of the Company’s indefinite-lived Skip Hop |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets at the end of any comparable period, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Prepaid information technology-related contracts (1) 12,652 14,100 Prepaid insurance 2,133 4,887 Prepaid income taxes 1,110 815 Other 17,917 16,530 Prepaid expenses and other current assets (2) $ 33,812 $ 36,332 (1) Primarily related to cloud computing arrangements and software maintenance contracts. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES Other current liabilities at the end of any comparable period, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Unredeemed gift cards $ 23,303 $ 21,619 Income taxes payable 17,484 13,850 Accrued employee benefits (1) 16,356 26,517 Accrued salaries and wages 11,519 10,821 Accrued taxes 10,445 12,883 Accrued interest 8,868 11,942 Accrued bonuses and incentive compensation (2) 7,244 47,363 Accrued other 27,220 31,454 Other current liabilities $ 122,439 $ 176,449 (1) Decrease primarily related to decreased employer match of employee contributions for the defined contributions savings plan. (2) Decrease primarily related to lower than expected financial performance in fiscal 2022 following an outsized expense in fiscal 2021 due to a record financial performance. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
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 effect 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, and employee benefit plans. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
PRINCIPLES OF CONSOLIDATION | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Carter’s, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
FISCAL YEAR | Fiscal Year The Company’s fiscal year ends on the Saturday in December or January nearest December 31. Every five or six years, our fiscal year includes an additional 53 rd week of results. Fiscal 2022, which ended on December 31, 2022, contained 52 weeks. Fiscal 2021, which ended on January 1, 2022, contained 52 weeks. Fiscal 2020, which ended on January 2, 2021, contained 53 weeks. Certain expenses increased in relationship to the additional revenue from the 53 rd week, while other expenses, such as fixed costs and expenses incurred on a calendar-month basis, did not increase. The consolidated gross margin for the additional revenue from the 53 rd week of fiscal 2020 was slightly lower than the consolidated gross margin for fiscal 2022 and fiscal 2021 due to increased promotional activity during the 53 rd week. |
USE OF ESTIMATES IN THE PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS | Use of Estimates in the Preparation of the Consolidated Financial Statements The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS | Foreign Currency Translation and Transactions Translation Adjustments The functional currency of substantially all of the Company’s foreign operations is the local currency in each foreign country. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the average exchange rates for the period. The resulting translation adjustments are recorded as a component of Accumulated other comprehensive income (loss) within the accompanying consolidated balance sheets. Transaction Adjustments The Company also recognizes gains and losses on transactions that are denominated in a currency other than the respective entity’s functional currency. Foreign currency transaction gains and losses also include the impact of intercompany loans with foreign subsidiaries. Foreign currency transaction gains and losses are recognized in earnings, as a separate component of Other expense (income), net, within the consolidated statements of operations. Foreign currency transaction gains and losses related to intercompany loans with foreign subsidiaries that are of a long-term nature are accounted for as translation adjustments and are included in Accumulated other comprehensive income (loss) within the accompanying consolidated balance sheets. |
CASH AND CASH EQUIVALENTS | Cash and Cash Equivalents The Company considers all highly liquid investments that have original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts and cash management funds invested in U.S. government instruments. These investments are stated at cost, which approximates fair value. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions; these amounts typically settle in less than five days. Money market funds held in a rabbi trust that are being used as investments to satisfy the Company’s obligations under its deferred compensation plans are treated as investments and recorded in Other assets on the accompanying consolidated balance sheets. Concentration of Cash Deposits Risk As of December 31, 2022, the Company had approximately $211.7 million of cash and cash equivalents in major financial institutions, including approximately $44.1 million in financial institutions located outside of the United States. The Company maintains cash deposits with major financial institutions that exceed the insurance coverage limits provided by the Federal Deposit Insurance Corporation in the U.S. and by similar insurers for deposits located outside the U.S. To mitigate this risk, the Company utilizes a policy of allocating cash deposits among major financial institutions that have been evaluated by the Company and third-party rating agencies as having acceptable risk profiles. |
ACCOUNTS RECEIVABLE | Accounts Receivable Concentration of Credit Risk In fiscal 2022, 2021, and 2020, no one customer accounted for 10% or more of the Company’s consolidated net sales. At December 31, 2022, three wholesale customers each had individual receivable balances in excess of 10% of gross accounts receivable, and the total receivable balances due from these three wholesale customers in the aggregate equaled approximately 56% of total gross trade receivables outstanding. At January 1, 2022, three wholesale customers each had individual receivable balances in excess of 10% of gross accounts receivable, and the total receivable balances due from these three wholesale customers in the aggregate equaled approximately 52% of total gross trade receivables outstanding. Valuation Accounts for Wholesale Accounts Receivable Accounts Receivable Reserves The Company’s accounts receivable reserves for wholesale customers include an allowance for expected credit losses and an allowance for chargebacks. The allowance for expected credit losses includes estimated losses resulting from the inability of our customers to make payments. If the financial condition of a customer were to deteriorate, resulting in an impairment of its ability to make payments, an additional allowance could be required. Past due balances over 90 days are reviewed individually for collectability. The Company’s credit and collections department reviews all other balances regularly. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The allowance for chargebacks is based on historical experience and includes estimated losses resulting from pricing adjustments, short shipments, handling charges, returns, and freight. Provisions for the allowance for expected credit losses are reflected in Selling, general, and administrative (“SG&A”) expenses on the consolidated statement of operations and provisions for chargebacks are reflected as a reduction in Net sales on the consolidated statement of operations. Sales Returns Reserves Except in very limited instances, the Company does not allow its wholesale customers to return goods to the Company. |
INVENTORIES | Inventories Inventories, which consist primarily of finished goods, are stated approximately at the lower of cost (using first-in, first-out basis for wholesale inventory and average cost for retail inventory) or net realizable value. Costs of finished goods inventories include all costs incurred to bring inventory to its current condition, including inbound freight, duties, and other costs. Obsolete, damaged, and excess inventory is carried at net realizable value by establishing reserves after assessing method of cost determination, historical recovery rates, current market conditions, and future marketing and sales plans. Rebates, discounts, and other cash consideration received from a vendor related to inventory purchases are reflected as reductions in the cost of the related inventory item and are therefore reflected in cost of sales when the related inventory item is sold. Adjustments to bring inventory to net realizable value as a result of obsolete, damaged, and excess inventory increased $4.9 million, or 34.0%, to $19.3 million as of December 31, 2022. This increase is primarily due to the increase in inventory balances, longer holding periods for inventory, and increased “pack and hold” inventory. |
LEASES | Leases The Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. Financial Presentation The Company determines if an arrangement is a lease at its inception. Operating leases are included in operating lease assets, current operating lease liabilities, and long-term operating lease liabilities in our consolidated balance sheets. Right of use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The operating lease ROU asset also includes initial direct costs and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. Certain of our lease agreements include variable rental payments based on a percentage of retail sales over contractual levels and others include variable rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Policy Elections Portfolio approach - In general, the Company accounts for the underlying leased asset and applies a discount rate at the lease level. However, there are certain non-real estate leases for which the Company utilizes the portfolio method by aggregating similar leased assets based on the underlying lease term. Non-lease component - The Company has lease agreements with lease and non-lease components. The Company has elected a policy to account for lease and non-lease components as a single component for all asset classes. Short-term lease - Leases with an initial term of 12 months or less are not recorded on the balance sheets. Discount rate - As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Renewal options - The Company evaluates the inclusion of renewal options on a lease by lease basis. In general, for leased retail real estate, the Company does not include renewal options in the underlying lease term. |
PROPERTY, PLANT, AND EQUIPMENT | Property, Plant, and Equipment Property, plant, and equipment are stated at cost, less accumulated depreciation and amortization. When fixed assets are sold or otherwise disposed of, the accounts are relieved of the original cost of the assets and the related accumulated depreciation or amortization and any resulting gain or loss is credited or charged to income. For financial reporting purposes, depreciation and amortization are computed on the straight-line method over the estimated useful lives of the assets as follows: buildings and improvements from 15 to 26 years, retail store fixtures, equipment, and computers from 3 to 10 years. Leasehold improvements and fixed assets purchased under capital lease are amortized over the lesser of the asset life or related lease term. The Company capitalizes the cost of its fixtures designed and purchased for use at major wholesale accounts. The cost of these fixtures is amortized over 3 years. |
INTERNAL-USE SOFTWARE | Internal-Use Software The Company purchases software licenses from external vendors and also develops software internally using Company employees and consultants. Software license costs, as well as development-stage costs for internally-developed software, are capitalized within Property, plant, and equipment, net on the consolidated balance sheets. All other costs, including preliminary project costs and post-implementation costs for internally-developed software, are expensed as incurred. Capitalized software is depreciated or amortized on the straight-line method over its estimated useful lives, from 3 to 10 years. If a software application does not include a purchased license for the software, such as a cloud-based software application, the arrangement is accounted for as a service contract. Implementation costs incurred in the development stage of such software applications are capitalized and reported in Prepaid expenses and other current assets on the consolidated balances sheets. All other costs, including preliminary project costs and post-implementation costs for these software applications, are expensed as |
GOODWILL AND OTHER INTANGIBILE ASSETS | Goodwill and Other Intangible Assets Annual Impairment Reviews The carrying values of the goodwill and indefinite-lived tradename assets are subject to annual impairment reviews which are performed as of the last day of each fiscal year. Additionally, a review for potential impairment is performed whenever significant events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. These impairment reviews are performed in accordance with ASC 350, “ Intangibles--Goodwill and Other” (“ASC 350”). Significant assumptions in the impairment models include estimates of revenue growth and profitability, terminal growth rates, discount rates, market multiples, an implied control premium, and, in the case of tradenames, royalty rates. Discount rates are dependent upon interest rates and the cost of capital at a point in time. Goodwill The Company performs impairment tests of its goodwill at the reporting unit level. Qualitative and quantitative methods are used to assess for impairment, including the use of discounted cash flows (“income approach”) and relevant data from guideline public companies (“market approach”). Under a qualitative assessment, the Company determines if it is “more likely than not” that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include but are not limited to: macroeconomic conditions, industry and market considerations, cost factors that may have a negative effect on earnings, overall financial performance, and other relevant entity-specific events. If the Company determines that it is “more likely than not” that the fair value of the reporting unit is less than its carrying value, then a goodwill impairment test using quantitative assessments must be performed. If it is determined that it is “not more likely than not” that the fair value of the reporting unit is less than its carrying value, then no further testing is required and the Company documents the relevant qualitative factors that support the strength in the fair value. Under a quantitative assessment for goodwill, the Company compares the fair value of a reporting unit to its carrying value, including goodwill. The Company uses a 50% weighting of the income approach and a 50% weighting of the market approach to determine the fair value of a reporting unit. The assumptions used in these approaches include revenue growth and profitability, terminal growth rates, discount rates, market multiples and an implied control premium. These assumptions are consistent with those of hypothetical marketplace participants. An impairment is recorded for any excess carrying value above the fair value of the reporting unit, not to exceed the carrying value of goodwill. Due to increased discount rates, decreased actual and projected sales and profitability, and the announcement of the substantial doubt of a Skip Hop wholesale customer to continue as a going concern in the first quarter of fiscal 2023, the Company performed a quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets as of December 31, 2022. Based upon this assessment, there were no impairments on the value of goodwill. Indefinite-lived Tradenames For indefinite-lived tradenames, the Company may utilize a qualitative assessment, as described above, to determine whether the fair value of an indefinite-lived asset is less than its carrying value. If a quantitative assessment is necessary, the Company determines fair value using the relief-from-royalty valuation method, which examines the hypothetical cost savings that accrue as a result of not having to license the tradename from another owner. The relief-from-royalty valuation method involves two steps: (1) estimation of reasonable royalty rates for the tradename assets and (2) the application of these royalty rates to a forecasted net revenue stream and discounting the resulting cash flows to determine a fair value. If the carrying amount exceeds the fair value of the tradename, an impairment charge is recognized in the amount of the excess. As discussed above, the Company performed quantitative impairment assessments on the value of the Company’s indefinite-lived intangible tradename assets as of December 31, 2022. Based upon this assessment, a non-cash pre-tax impairment charge of $9.0 million was recorded during the fourth quarter of fiscal 2022 on our indefinite-lived Skip Hop tradename asset. The charge recorded on our indefinite-lived Skip Hop tradename asset included charges of $5.6 million, $3.0 million, and $0.4 million 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. The carrying value of the Company’s indefinite-lived Skip Hop tradename asset as of December 31, 2022 was $6.0 million. |
IMPAIRMENT OF OTHER LONG-LIVED ASSETS | Impairment of Other Long-Lived Assets The Company reviews other long-lived assets, including lease assets, property, plant, and equipment, definite-lived tradename assets, and customer relationship assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such an asset may not be recoverable. Management will determine whether there has been a permanent impairment on such assets held for use by comparing anticipated undiscounted future cash flows from the use and eventual disposition of the asset or asset group to the carrying value of the asset. The amount of any resulting impairment will be calculated by comparing the carrying value to fair value, which may be estimated using the present value of the same cash flows. Long-lived assets that meet the definition of held for sale will be valued at the lower of carrying amount or fair value, less costs to sell. There were no impairments to other long-lived assets in fiscal 2022. |
DEFERRED DEBT ISSUANCE COSTS | Deferred Debt Issuance Costs Debt issuance costs associated with the Company’s secured revolving credit facility and senior notes are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company’s senior notes are presented on the Company’s consolidated balance sheet as a direct reduction in the carrying value of the associated debt liability. Fees paid to lenders by the Company to obtain its secured revolving credit facility are included within Other assets on the Company’s consolidated balance sheets and classified as either current or non-current based on the expiration date of the credit facility. |
FAIR VALUE MEASUREMENTS | Fair Value Measurements The fair value framework requires the Company to categorize certain assets and liabilities into three levels, based upon the assumptions used to price those assets or liabilities. The three levels are defined as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. The Company measures its pension assets, deferred compensation plan investment assets, and any unsettled foreign currency forward contracts at fair value. T he Company’s cash and cash equivalents, accounts receivable, and accounts payable are short-term in nature. As such, their carrying value approximates fair value. The carrying values of the Company’s outstanding borrowings are not required to be remeasured and adjusted to the then-current fair values at the end of each reporting period. Instead, the fair values of the Company’s outstanding borrowings are disclosed at the end of each reporting period in Note 15, Fair Value Measurements |
REVENUE RECOGNITION | Revenue Recognition In accordance with ASC 606, “ Revenue from Contracts with Customers” , 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 when (or as) the performance obligations are satisfied. Performance Obligations The Company identifies each distinct performance obligation to transfer goods (or bundle of goods). Revenue transactions associated with the sale of products to customers through wholesale and international channels and to retail customers that are not a member of the My Rewarding Moments loyalty program comprise of a single performance obligation. Revenue transactions associated with the sale of products to retail customers that are a member of the My Rewarding Moments loyalty program comprise of two performance obligations: the transfer of control of the goods to the customer and the option for members to earn loyalty points that accumulate towards earning reward certificates. 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 has a single performance obligation in its wholesale arrangements, including replenishment orders. The Company typically satisfies its performance obligation when it transfers control of the goods to the customer 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. To ensure proper timing of revenue recognition, the Company defers the recognition of revenue for shipments that originated at the end of the reporting period in which the Company retains the risk of loss during shipment. “Pack and hold” inventories are not yet associated with any purchase order or purchase commitment. Therefore, these inventories are treated consistently with the rest of our wholesale inventory, and no deferral of revenue has been recognized. 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. For purchases made through the Company’s eCommerce channel, revenue is recognized when the goods are physically delivered to the customer. To ensure proper timing of revenue recognition, the Company defers the recognition of revenue for eCommerce channel shipments that originated at the end of the reporting period. Loyalty Program - U.S. retail customers can earn loyalty points that accumulate towards earning reward certificates that are redeemable for a specified amount off of future purchases. Loyalty points expire six months from the day they were earned, and reward certificates expire 45 days after issuance. Points and reward certificates earned by retail customers under My Rewarding Moments , the Company’s loyalty program, represent a separate performance obligation. For transactions where a customer earns loyalty points, the Company allocates revenue between the goods sold and the loyalty points expected to be earned towards a reward certificate based upon the relative standalone selling price. The revenue that is deferred is recorded within Other current liabilities on the Company’s consolidated balance sheets and then recognized as revenue upon redemption of the reward certificate. Loyalty program breakage is recognized as revenue based on the customer redemption pattern. Gift Cards - Customer purchases of gift cards are not recognized as revenue until the gift card is redeemed. The revenue that is deferred is recorded within Other current liabilities on the Company’s consolidated balance sheets. Gifts cards do not have an expiration date however, gift card breakage is recognized as revenue based upon the historical customer redemption pattern. Royalty Revenues - The Company has a single performance obligation in its licensing agreements with domestic and international licensees: to grant licensees the right to access certain trademarks in return for royalty payments or licensing fees. The Company satisfies its performance obligations with licensees over time as customers have the right to use the intellectual property over the contract period. Royalty revenues are included within Royalty income, net on the Company’s consolidated statements of operations. 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, which is generally sixty days or less. Returns and Refunds The Company establishes return provisions for retail customers in the period the sales occur. Return provisions are calculated based on historical return data and are recorded within Accounts receivable, net on the Company’s consolidated balance sheets. Except in very limited instances, the Company does not allow its wholesale customers to return goods to the Company. Significant Judgments Sale of Goods - The Company relies on shipping terms to determine when performance obligations are satisfied. The Company recognizes the revenue once control passes to the customer. When goods are shipped to wholesale customers “FOB Shipping Point,” control of the goods is transferred to the customer at the time of shipment. When goods are shipped to wholesale customers “FOB Destination,” control of the goods is transferred to the customer when the goods reach the customer. For most retail transactions in stores, no significant judgments are involved since revenue is recognized at the point of sale when tender is exchanged and the customer receives the goods. For retail transactions made through the Company's eCommerce channel, revenue is recognized when the goods are physically delivered to the customer. The Company recognizes revenue from omni-channel sales, including buy-on-line and pick-up in-store, buy-on-line, ship-to-store, and buy-on-line, deliver-from-store, when the product has been picked up by the customer at the store or when the product is physically delivered to the customer. 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. Additionally, the Company recognizes an allowance for chargebacks for wholesale customers that is based on historical experience and includes estimated losses resulting from pricing adjustments, short shipments, handling charges, returns, and freight. 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, including sales through our My Rewarding Moments loyalty program, 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. This approach is primarily used to estimate the redemption of loyalty points, loyalty point breakage, and gift card breakage. • 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 and are included in Cost of goods sold when the related revenues are recognized. • 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. Cooperative advertising arrangements reimburse customers for marketing activities for certain of our products. The Company records these reimbursements under cooperative advertising arrangements with certain of its major wholesale customers at fair value. Fair value is determined based upon, among other factors, comparable market analysis for similar advertisements. The Company has included the fair value of these arrangements of approximately $0.6 million for fiscal 2022, $0.2 million for fiscal 2021, and $0.5 million for fiscal 2020 as a component of SG&A expenses on the Company’s consolidated statements of operations, rather than as a reduction of Net sales. Amounts determined to be in excess of the fair value of these arrangements are recorded as a reduction of Net sales. For arrangements in which the Company does not receive a distinct good or service, we record these reimbursements as a reduction of net sales. The majority of the Company’s digital cooperative advertising arrangements are recorded as a reduction of net sales as there was no distinct good or service received by the Company. |
COST OF GOODS SOLD AND GROSS PROFIT | Costs of Goods Sold and Selling, General and Administrative Expenses In addition to the cost of product, cost of goods sold include changes to our inventory reserve and expenses related to the merchandising, design, and procurement of product, including inbound freight costs, purchasing and receiving costs, and inspection costs. Also included in costs of goods sold are the costs of shipping eCommerce product to end consumers. For omni-channel transactions, costs of goods sold include the costs of shipping product to end customers or to retail stores. Retail store occupancy costs, distribution expenses, and generally all expenses other than interest and income taxes are included in SG&A expenses. Distribution expenses that are included in SG&A primarily consist of payments to third-party shippers and handling costs to process product through our distribution facilities, including eCommerce fulfillment costs, and delivery to our wholesale customers and to our retail stores. Distribution expenses included in SG&A totaled $216.2 million, $206.6 million, and $190.7 million for fiscal years 2022, 2021, and 2020, respectively. Gross Profit Gross profit is calculated as consolidated net sales less cost of goods sold less adverse purchase commitments (inventory and raw materials), net. Gross margin is calculated as gross profit divided by consolidated net sales. Definitions of gross profit and gross margin vary across the industry and, as such, our metrics may not be comparable to other companies. |
INCOME FROM ROYALTIES AND LICENSE FEES | Income from Royalties and License Fees We license our Carter’s , OshKosh , Child of Mine , Just One You , Simple Joys , and Little Planet |
ADVERTISING EXPENSES | Advertising Expenses Advertising production costs and costs associated with communicating advertising that has been produced are expensed when the advertising event takes place. Certain other advertising costs where it is uncertain when the expected benefits would occur are expensed in the period incurred. Advertising expenses were $96.0 million, $102.8 million, and $75.6 million for fiscal years 2022, 2021, and 2020, respectively, and are included in SG&A expenses on the Company’s consolidated statement of operations. Deferred advertising costs for advertisements that have not yet occurred or for advertising services that have not yet been received were $1.9 million and $4.1 million at December 31, 2022 and January 1, 2022, respectively, and are included in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. |
STOCK-BASED COMPENSATION ARRANGEMENTS | Stock-Based Compensation Arrangements The Company recognizes the cost resulting from all stock-based compensation arrangements in the financial statements at grant date fair value. Stock-based compensation expense is recognized over the requisite service period, net of estimated forfeitures. Subjective assumptions include a forfeiture rate assumption for all restricted stock awards and an estimate for the probability that the performance criteria will be achieved for performance awards. We estimate forfeitures of restricted stock awards based on historical experience and expected future activity. Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation and consequently, the related amount recognized in the accompanying consolidated statements of operations. During the requisite service period, the Company also recognizes a deferred income tax benefit for the expense recognized for U.S. GAAP. At time of subsequent vesting, exercise, forfeiture, or expiration of an award, the difference between the Company’s actual income tax deduction, if any, and the previously accrued income tax benefit is recognized in income tax expense/benefit during the current period. Stock Options The fair value of stock options is determined based on the Black-Scholes option pricing model, which requires the use of subjective assumptions. There has been no issuance of stock options since 2018, and there are no unrecognized compensation costs remaining related to stock options. Time-Based Restricted Stock Awards The fair value of time-based restricted stock awards is determined based on the quoted closing price of the Company’s common stock on the date of grant and is recognized as compensation expense over the vesting term of the awards, net of estimated forfeitures. Performance-Based Restricted Stock Awards The Company accounts for its performance-based restricted stock awards based on the quoted closing price of the Company’s common stock on the date of grant and records stock-based compensation expense over the vesting term of the awards based on the probability that the performance criteria will be achieved, net of estimated forfeitures. The Company reassesses the probability of vesting at each reporting period and adjusts stock-based compensation expense based on its probability assessment. Stock Awards |
INCOME TAXES | Income Taxes The accompanying consolidated financial statements reflect current and deferred tax provisions, in accordance with ASC 740, Income Taxes . The deferred tax provision is determined under the liability method. Deferred tax assets and liabilities are recognized based on differences between the book and tax basis of assets and liabilities using presently enacted tax rates. Deferred tax assets are a component of non-current Other assets in the Company’s consolidated balance sheet. Valuation allowances are established when it is “more likely than not” that a deferred tax asset will not be recovered. The provision for income taxes is the sum of the amount of income taxes paid or payable for the year as determined by applying the provisions of enacted tax laws to the taxable income for that year, the net change during the year in deferred tax assets and liabilities, and the net change during the year in any valuation allowances. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting dates. A company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. If it is more likely than not that a tax position would not be sustained, then no tax benefit would be recognized. Where applicable, associated interest and penalties are also recorded. Interest is recorded as a component of Interest expense and penalties, if any, are recorded within the provision for incomes taxes in the consolidated statements of operations and are classified on the consolidated balance sheets with the related liability for uncertain tax contingency liabilities. Supplemental Cash Flow Information Interest paid in cash approximated $41.2 million, $59.0 million, and $55.1 million for fiscal years 2022, 2021, and 2020, respectively. Income taxes paid in cash approximated $64.0 million, $115.3 million and $54.7 million for fiscal years 2022, 2021, and 2020, respectively. Additions to property, plant and equipment of approximately $10.1 million, $15.4 million, and $6.0 million were excluded from capital expenditures on the Company’s consolidated statements of cash flows for fiscal years 2022, 2021, and 2020, respectively, since these amounts were accrued and unpaid at the end of each respective fiscal year. |
EARNINGS PER SHARE | Earnings Per Share The Company calculates basic and diluted net income per common share under the two-class method for unvested share-based payment awards that contain participating rights to dividends or dividend equivalents (whether paid or unpaid). Basic net income per share is calculated by dividing net income for the period by the weighted-average common shares outstanding for the period. Diluted net income per share includes the effect of dilutive instruments (primarily stock options) and uses the average share price for the period in determining the number of shares that are to be added to the weighted-average number of shares outstanding. |
OPEN MARKET REPURCHASES OF COMMON STOCK | Open Market Repurchases of Common Stock Shares of the Company’s common stock that are repurchased by the Company through open market transactions are retired. Through the end of fiscal 2022, all such open market repurchases have been at prices that exceeded the par value of the repurchased common stock, and the amounts of the purchase prices that exceeded par value were charged to additional paid-in capital or to retained earnings if the balance in additional paid-in capital was not sufficient. |
EMPLOYEE BENEFIT PLANS | Employee Benefit Plans The Company has several defined benefit plans. Various actuarial methods and assumptions are used in determining net pension and post-retirement costs and obligations. Key assumptions include the discount rate used to determine the present value of future benefits and the expected long-term rate of return on plan assets. The over-funded or under-funded status of the defined benefit plans is recorded as an asset or liability on the consolidated balance sheet. Any service costs that arise during the period are presented in the same statement line item as other employee compensation on the consolidated statement of operations. All other components of current period costs related to defined benefit plans, such as prior service costs and actuarial gains and losses, are presented in Other (income) expense, net on the consolidated statement of operations. The actuarial gains or losses that arise during the period are recognized as a component of comprehensive income or loss, net of tax. These costs or income are then subsequently recognized as components of net periodic benefit cost in the consolidated statements of operations. Under the provisions of ASU No. 2015-04, Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets , the Company is permitted to use December 31 of each year, as opposed to the Company’s last day of each fiscal year, as an alternate measurement date for its defined benefit plans. |
FACILITY CLOSURE AND OFFICE CONSOLIDATION | Facility Closure and Severance Costs The Company records severance costs when the appropriate notifications have been made to affected employees or when the decision is made, if the one-time benefits are contractual. When employees are required to work for a period before termination, the severance costs are recognized over the required service period. For operating leases, lease termination costs are recognized at fair value at the date the Company ceases to use the leased property. Useful lives assigned to fixed assets at the facility to be closed are revised based on the specifics of the exit plan, resulting in accelerated depreciation expense. |
SEASONALITY | SeasonalityThe Company experiences seasonal fluctuations in its sales and profitability due to the timing of certain holidays and key retail shopping periods, typically resulting in lower sales and gross profit in the first half of its fiscal year. Accordingly, the Company’s results of operations during the first half of the year may not be indicative of the results for the full year. |
RECENT ACCOUNTING PRONOUNCEMENTS | Recent Accounting Pronouncements To Be Adopted After Fiscal 2022 Supplier Finance Programs (ASU 2022-04) In September 2022, the FASB issued ASU No. 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”) . This new guidance is designed to enhance transparency around supplier finance programs by requiring new disclosures that would allow a user of the financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The effect of the adoption of ASU 2022-04 is not expected to be material to the Company’s consolidated financial statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
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 certain of its licensees. Disaggregated revenues from these sources for the fiscal years presented were as follows: Fiscal year ended December 31, 2022 (52 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 1,080,471 $ 172,200 $ 1,252,671 Direct-to-consumer 1,680,159 — 279,903 1,960,062 $ 1,680,159 $ 1,080,471 $ 452,103 $ 3,212,733 Royalty income, net $ 8,815 $ 12,915 $ 4,090 $ 25,820 Fiscal year ended January 1, 2022 (52 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 1,126,415 $ 171,703 $ 1,298,118 Direct-to-consumer 1,899,262 — 289,060 2,188,322 $ 1,899,262 $ 1,126,415 $ 460,763 $ 3,486,440 Royalty income, net $ 8,541 $ 15,808 $ 4,332 $ 28,681 Fiscal year ended January 2, 2021 (53 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Wholesale channel $ — $ 996,088 $ 120,244 $ 1,116,332 Direct-to-consumer 1,671,644 — 236,358 1,908,002 $ 1,671,644 $ 996,088 $ 356,602 $ 3,024,334 Royalty income, net $ 8,732 $ 13,120 $ 4,424 $ 26,276 |
Accounts Receivable from Customers and Licensees | Accounts Receivable from Customers and Licensees The components of Accounts receivable, net, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Trade receivables from wholesale customers, net $ 195,078 $ 233,928 Royalties receivable, net 5,386 5,769 Other receivables (1) 14,571 10,352 Total receivables $ 215,035 $ 250,049 Less: Wholesale accounts receivable reserves (2)(3) (16,448) (18,695) Accounts receivable, net $ 198,587 $ 231,354 (1) Includes tenant allowances, tax, payroll, gift card and other receivables. (2) Includes allowance for chargebacks of $9.3 million and $11.4 million for the periods ended December 31, 2022 and January 1, 2022, respectively. (3) Includes allowance for credit losses of $7.2 million and $7.3 million for the periods ended December 31, 2022 and January 1, 2022, respectively. |
Accounts Receivable Reserves | Information regarding Wholesale accounts receivable reserves is as follows: (dollars in thousands) Wholesale accounts receivable reserves Balance at December 28, 2019 $ 11,283 Additional provisions 9,625 Charges to reserve (1) (8,542) Balance at January 2, 2021 $ 12,366 Additional provisions 13,282 Charges to reserve (6,953) Balance at January 1, 2022 $ 18,695 Additional provisions 9,280 Charges to reserve (11,527) Balance at December 31, 2022 $ 16,448 (1) Charges to the reserve include total write-offs of $6.5 million related to the bankruptcy of customers during fiscal 2020. |
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 a customer and has a future obligation to transfer goods to the customer. Total contract liabilities consisted of the following amounts: (dollars in thousands) December 31, 2022 January 1, 2022 Contract liabilities - current: Unredeemed gift cards $ 23,303 $ 21,619 Unredeemed customer loyalty rewards 5,276 5,659 Carter’s credit card - upfront bonus (1) 714 714 Total contract liabilities - current (2) $ 29,293 $ 27,992 Contract liabilities - non-current (3) $ 1,429 $ 2,143 Total contract liabilities $ 30,722 $ 30,135 (1) This amount reflects the current portion of the Carter’s credit card bonus to be recognized as revenue over the next twelve months. (2) Included within Other current liabilities on the Company’s consolidated balance sheet. (3) This amount reflects the non-current portion of the Carter’s credit card upfront bonus and is included within Other long-term liabilities on the Company’s consolidated balance sheet. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 fiscal periods indicated: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Operating lease cost $ 160,210 $ 166,481 $ 180,056 Variable lease cost (*) 66,400 64,410 71,971 Net lease cost $ 226,610 $ 230,891 $ 252,027 (*) Includes short-term leases, which are not material, and operating lease impairment charges. |
Supplemental Information | Supplemental balance sheet information related to leases was as follows: December 31, 2022 January 1, 2022 Weighted average remaining operating lease term (years) 4.7 4.9 Weighted average discount rate for operating leases 3.72% 3.26% |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2022, the maturities of lease liabilities were as follows: (dollars in thousands) Operating leases 2023 $ 157,254 2024 151,059 2025 107,022 2026 73,533 2027 51,050 After 2027 80,640 Total lease payments $ 620,558 Less: Interest (56,385) Present value of lease liabilities (*) $ 564,173 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, plant, and equipment | Property, plant, and equipment, net consists of the following: (dollars in thousands) December 31, 2022 January 1, 2022 Land, building, and leasehold improvements $ 332,971 $ 333,322 Fixtures, equipment, and computer hardware 281,830 280,022 Computer software 115,706 113,284 Construction in progress (*) 28,843 18,302 759,350 744,930 Accumulated depreciation and amortization (569,528) (528,926) Total $ 189,822 $ 216,004 (*) Increase relates primarily to retail store openings and remodels. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 January 2, 2021 (*) $ 83,934 $ 74,454 $ 53,388 $ 211,776 Foreign currency impact — — 247 247 Balance at January 1, 2022 (*) $ 83,934 $ 74,454 $ 53,635 $ 212,023 Foreign currency impact — — (2,690) (2,690) Balance at December 31, 2022 (*) $ 83,934 $ 74,454 $ 50,945 $ 209,333 (*) Goodwill for the International reporting unit is net of accumulated impairment losses of $17.7 million. |
Tradename and Intangible Assets | A summary of the carrying value of the Company’s intangible assets were as follows: December 31, 2022 January 1, 2022 (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 (1) Indefinite 6,000 — 6,000 15,000 — 15,000 Finite-life tradenames (2) 5 - 20 years 3,911 1,751 2,160 3,911 1,501 2,410 Total tradenames, net $ 300,144 $ 1,751 $ 298,393 $ 309,144 $ 1,501 $ 307,643 Skip Hop customer relationships 15 years $ 47,300 $ 18,187 $ 29,113 $ 47,300 $ 15,010 $ 32,290 Carter’s Mexico customer relationships 10 years 3,125 1,674 1,451 3,047 1,368 1,679 Total customer relationships, net $ 50,425 $ 19,861 $ 30,564 $ 50,347 $ 16,378 $ 33,969 (1) In fiscal 2022, impairment charges of $5.6 million, $3.0 million, and $0.4 million were 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. (2) Relates to the acquisition of rights to the Carter’s brand in Chile in December 2014 and the acquisition of the Skip Hop brand in February 2017. |
Future Amortization Expense | The estimated amortization expense for the next five fiscal years is as follows: (dollars in thousands) Amortization expense 2023 $ 3,701 2024 $ 3,671 2025 $ 3,671 2026 $ 3,671 2027 $ 3,539 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive (loss) income | The components of Accumulated other comprehensive (loss) income consisted of the following: (dollars in thousands) Pension liability adjustments Post-retirement liability adjustments Cumulative translation adjustments Accumulated other comprehensive (loss) income Balance at December 28, 2019 $ (10,696) $ 1,584 $ (26,522) $ (35,634) Fiscal year 2020 change (2,197) (144) 5,215 2,874 Balance at January 2, 2021 (12,893) 1,440 (21,307) (32,760) Fiscal year 2021 change 3,973 (115) 5 3,863 Balance at January 1, 2022 (8,920) 1,325 (21,302) (28,897) Fiscal year 2022 change 1,739 344 (7,524) (5,441) Balance at December 31, 2022 $ (7,181) $ 1,669 $ (28,826) $ (34,338) |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: (dollars in thousands) December 31, 2022 January 1, 2022 $500 million, 5.500% Senior Notes due 2025 $ — $ 500,000 $500 million, 5.625% Senior Notes due 2027 500,000 500,000 Total senior notes $ 500,000 $ 1,000,000 Less: unamortized issuance-related costs for senior notes (3,376) (8,630) Senior notes, net $ 496,624 $ 991,370 Secured revolving credit facility 120,000 — Total long-term debt, net $ 616,624 $ 991,370 |
Schedule of redemption price applicable where redemption occurs | The redemption price is applicable when the redemption occurs during the twelve-month period beginning on March 15 of each of the years indicated is as follows: Year Percentage 2023 101.41 % 2024 and thereafter 100.00 % |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Open Market Repurchases | For the fiscal year ended December 31, 2022 January 1, 2022 January 2, 2021 Number of shares repurchased 3,747,187 2,967,619 474,684 Aggregate cost of shares repurchased (dollars in thousands) $ 299,667 $ 299,339 $ 45,255 Average price per share $ 79.97 $ 100.87 $ 95.34 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of recorded stock-based compensation cost | The Company recorded stock-based compensation cost as follows: For the fiscal years ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Stock options $ 189 $ 1,347 $ 2,694 Restricted stock: Time-based awards 17,893 14,756 10,468 Performance-based awards 2,091 3,608 (1,927) Stock awards 1,706 1,318 1,595 Total $ 21,879 $ 21,029 $ 12,830 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 fiscal 2020, the achievement of performance target estimates was revised resulting in a reversal of previously recognized stock-based compensation expense for outstanding performance-based awards. |
Summary of stock option activity | Changes in the Company’s stock options for the fiscal year ended December 31, 2022 were as follows: Number of shares Weighted- average exercise price Weighted-average remaining contractual terms (years) Aggregate intrinsic value Outstanding, January 1, 2022 658,666 $ 89.32 Granted (*) — $ — Exercised (76,550) $ 58.23 Forfeited — $ — Expired (19,068) $ 105.76 Outstanding, December 31, 2022 563,048 $ 92.99 3.63 $ 430 Vested and expected to vest, December 31, 2022 563,048 $ 92.99 3.63 $ 430 Exercisable, December 31, 2022 563,048 $ 92.99 3.63 $ 430 |
Summary of restricted stock award activity | The following table summarizes activity related to all restricted stock awards during the fiscal year ended December 31, 2022: Restricted Weighted-average grant-date Outstanding, January 1, 2022 544,713 $ 98.33 Granted 342,110 $ 89.31 Vested (205,120) $ 95.54 Forfeited (52,017) $ 93.79 Outstanding, December 31, 2022 629,686 $ 94.71 |
Summary of issued shares of common stock to non-management board members | Fiscal year Number of shares granted Weighted-average fair value per share 2020 58,320 $ 108.76 2021 (*) — $ — 2022 89,760 $ 91.12 (*) The Company did not grant any performance-based restricted stock awards in fiscal 2021. Included in restricted stock awards are grants to non-management members of the Company’s Board of Directors. At issuance, these awards were fully vested and issued as shares of the Company’s common stock. The Company records the stock-based compensation expense immediately as there are no vesting terms. During fiscal years 2022, 2021, and 2020, such awards were as follows: Fiscal year Number of shares issued Fair value per share Aggregate value 2020 21,362 $ 74.67 $ 1,595 2021 13,037 $ 101.09 $ 1,318 2022 21,725 $ 78.51 $ 1,706 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Reconciliation of changes in the projected pension benefit obligation and plan assets | A reconciliation of changes in the projected pension benefit obligation and plan assets is as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 70,875 $ 74,128 Interest cost 1,909 1,818 Actuarial gain (16,021) (2,405) Benefits paid (2,916) (2,666) Projected benefit obligation at end of year $ 53,847 $ 70,875 Change in plan assets: Fair value of plan assets at beginning of year $ 68,689 $ 65,417 Actual return on plan assets (10,528) 5,938 Benefits paid (2,916) (2,666) Fair value of plan assets at end of year $ 55,245 $ 68,689 (Funded) Unfunded status $ (1,398) $ 2,186 |
Components of post retirement benefit expense and pension expense | The components of net periodic pension cost recognized in the statement of operations and changes recognized in other comprehensive income were as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Recognized in the statement of operations: Interest cost $ 1,909 $ 1,818 $ 2,171 Expected return on plan assets (3,432) (3,577) (3,217) Amortization of net loss (*) 217 428 510 Net periodic pension benefit $ (1,306) $ (1,331) $ (536) Changes recognized in other comprehensive income: Net (gain) loss arising during the fiscal year $ (2,062) $ (4,765) $ 3,387 Amortization of net loss (*) (217) (428) (510) Total changes recognized in other comprehensive income $ (2,279) $ (5,193) $ 2,877 Total net periodic cost and changes recognized in other comprehensive income $ (3,585) $ (6,524) $ 2,341 (*) Represents pre-tax amounts reclassified from accumulated other comprehensive loss. For fiscal 2023, approximately $0.2 million is expected to be reclassified from accumulated other comprehensive loss to a component of net periodic pension cost. The components of net periodic post-retirement benefit cost recognized in the statement of operations and changes recognized in other comprehensive income were as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Recognized in the statement of operations: Service cost $ 14 $ 15 $ 25 Interest cost 63 57 94 Amortization of net gain (*) (320) (295) (345) Net periodic post-retirement benefit (income) cost $ (243) $ (223) $ (226) Changes recognized in other comprehensive income: Net (gain) loss arising during the fiscal year $ (763) $ (140) $ (162) Amortization of net gain (*) 320 295 345 Total changes recognized in other comprehensive income $ (443) $ 155 $ 183 Total net periodic post-retirement benefit (income) cost and changes recognized in other comprehensive income $ (686) $ (68) $ (43) (*) Represents pre-tax amounts reclassified from accumulated other comprehensive loss. For fiscal 2023, approximately $0.4 million is expected to be reclassified from accumulated other comprehensive loss to a component of net periodic post-retirement benefit cost. |
Schedule of assumptions used in actuarial computations | The actuarial assumptions used in determining the benefit obligation and net periodic pension cost for our pension plan is presented in the following table: Benefit obligation 2022 2021 Discount rate 5.00% 2.75% Net periodic pension cost 2022 2021 2020 Discount rate 2.75% 2.50% 3.25% Expected long-term rate of return on plan assets 5.50% 6.00% 6.00% The actuarial computations utilized the following assumptions, using year-end measurement dates: Post-retirement benefit obligation 2022 2021 Discount rate 4.75% 2.50% Net periodic post-retirement benefit cost 2022 2021 2020 Discount rate 2.50% 2.00% 3.00% |
Expected benefit payments for defined benefit pension plans for the next ten fiscal years | The Company currently expects benefit payments for its defined benefit pension plans as follows for the next ten fiscal years: (dollars in thousands) 2023 $ 3,000 2024 $ 3,160 2025 $ 3,310 2026 $ 3,530 2027 $ 3,580 2028-2032 $ 19,510 |
Fair value of the Company's pension plan assets by category | The fair value of the Company’s pension plan assets at December 31, 2022 and January 1, 2022, by asset category, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Asset category Total Level 1 Level 2 Total Level 1 Level 2 Cash and cash equivalents $ 2,204 $ 2,204 $ — $ 1,370 $ 1,370 $ — Equity securities: U.S. Large-Cap blend (1) — — — 7,508 7,508 — U.S. Large-Cap growth — — — 3,390 3,390 — U.S. Mid-Cap growth — — — 3,426 3,426 — U.S. Small-Cap blend — — — 2,054 2,054 — International blend — — — 8,200 8,200 — Fixed income securities: Corporate bonds (2) 53,041 52,805 236 39,970 39,746 224 Real estate (3) — — — 2,771 2,771 — $ 55,245 $ 55,009 $ 236 $ 68,689 $ 68,465 $ 224 (1) This category comprises low-cost equity index funds not actively managed that track the Standard & Poor’s 500 Index. (2) This category invests in both U.S. Treasuries and mid-term corporate debt from U.S. issuers from diverse industries. (3) This category represents an investment in a mutual fund that invests primarily in real estate securities, including common stocks, preferred stock and other equity securities issued by real estate companies. |
Reconciliation of accumulated post retirement benefit obligation | The following is a reconciliation of the accumulated post-retirement benefit obligation (“APBO”) under this plan: For the fiscal years ended (dollars in thousands) December 31, 2022 January 1, 2022 APBO at beginning of fiscal year $ 2,662 $ 2,998 Service cost 14 15 Interest cost 63 57 Actuarial (gain) loss (763) (140) Plan participants’ contribution 15 20 Benefits paid (246) (288) APBO at end of fiscal year $ 1,745 $ 2,662 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | The provision for income taxes consisted of the following: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Current tax provision: Federal $ 43,569 $ 75,408 $ 31,085 State 8,307 16,905 6,331 Foreign 15,562 19,761 11,105 Total current provision $ 67,438 $ 112,074 $ 48,521 Deferred tax provision (benefit): Federal $ (1,484) $ (10,541) $ (18,449) State 425 (2,428) (3,741) Foreign 319 (563) (1,064) Total deferred provision (740) (13,532) (23,254) Total provision $ 66,698 $ 98,542 $ 25,267 The components of income before income taxes were as follows: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Domestic $ 227,929 $ 333,900 $ 73,525 Foreign 88,807 104,390 61,459 Total $ 316,736 $ 438,290 $ 134,984 |
Federal statutory tax rate reconciliation | The difference between the Company’s effective income tax rate and the federal statutory tax rate is reconciled below: For the fiscal year ended December 31, 2022 January 1, 2022 January 2, 2021 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal income tax benefit 2.8 % 3.0 % 2.7 % Impact of foreign operations (2.0) % (1.8) % (4.8) % Settlement of uncertain tax positions (0.7) % (0.3) % (1.3) % Benefit from stock-based compensation (0.1) % (0.3) % (1.1) % Goodwill impairments and other 0.1 % 0.9 % 2.2 % Total 21.1 % 22.5 % 18.7 % |
Components of deferred tax assets and liabilities | The following table reflects the Company’s calculation of the components of deferred tax assets and liabilities as of December 31, 2022 and January 1, 2022. (dollars in thousands) December 31, 2022 January 1, 2022 Deferred tax assets: Assets (Liabilities) Accounts receivable allowance $ 6,715 $ 7,026 Inventory 16,902 11,923 Accrued liabilities 8,230 22,226 Equity-based compensation 4,397 3,410 Deferred employee benefits 3,247 5,144 Leasing liabilities 83,886 97,269 Other 3,724 3,845 Total deferred tax assets 127,101 150,843 Deferred tax liabilities: Depreciation (18,560) (26,472) Leasing assets (72,162) (80,818) Tradename and licensing agreements (73,534) (76,275) Other (1,614) (5,388) Total deferred tax liabilities (165,870) (188,953) Net deferred tax liability $ (38,769) $ (38,110) |
Net deferred tax liability | (dollars in thousands) December 31, 2022 January 1, 2022 Assets (Liabilities) Deferred tax assets $ 2,466 $ 2,800 Deferred tax liabilities (41,235) (40,910) Net deferred tax liability $ (38,769) $ (38,110) |
Unrecognized tax benefits | The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits: (dollars in thousands) Balance at December 28, 2019 $ 13,923 Additions based on tax positions related to fiscal 2020 760 Reductions for prior year tax positions (104) Reductions for lapse of statute of limitations (2,056) Balance at January 2, 2021 $ 12,523 Additions based on tax positions related to fiscal 2021 810 Reductions for prior year tax positions (2,207) Reductions for lapse of statute of limitations (2,270) Balance at January 1, 2022 $ 8,856 Additions based on tax positions related to fiscal 2022 1,040 Reductions for prior year tax positions — Reductions for lapse of statute of limitations (2,803) Balance at December 31, 2022 $ 7,093 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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: For the fiscal year ended December 31, 2022 January 1, 2022 January 2, 2021 (52 weeks) (52 weeks) (53 weeks) Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 38,822,737 42,853,009 43,242,967 Dilutive effect of equity awards 27,908 149,619 164,754 Diluted number of common and common equivalent shares outstanding 38,850,645 43,002,628 43,407,721 Earnings per share: (dollars in thousands, except per share data) Basic net income per common share: Net income $ 250,038 $ 339,748 $ 109,717 Income allocated to participating securities (3,714) (4,113) (1,118) Net income available to common shareholders $ 246,324 $ 335,635 $ 108,599 Basic net income per common share $ 6.34 $ 7.83 $ 2.51 Diluted net income per common share: Net income $ 250,038 $ 339,748 $ 109,717 Income allocated to participating securities (3,712) (4,102) (1,115) Net income available to common shareholders $ 246,326 $ 335,646 $ 108,602 Diluted net income per common share $ 6.34 $ 7.81 $ 2.50 Anti-dilutive shares excluded from dilutive earnings per share calculations (1) 526,618 176,475 564,131 (1) The volume of antidilutive shares is, in part, due to the related unamortized compensation costs. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The table below presents certain segment information for our reportable segments and unallocated corporate expenses for the periods indicated: For the fiscal year ended (dollars in thousands) December 31, 2022 % of January 1, 2022 % of Consolidated Net Sales January 2, 2021 % of Consolidated Net Sales Net sales : U.S. Retail $ 1,680,159 52.3 % $ 1,899,262 54.5 % $ 1,671,644 55.3 % U.S. Wholesale 1,080,471 33.6 % 1,126,415 32.3 % 996,088 32.9 % International 452,103 14.1 % 460,763 13.2 % 356,602 11.8 % Total consolidated net sales $ 3,212,733 100.0 % $ 3,486,440 100.0 % $ 3,024,334 100.0 % Operating income (loss): % of % of % of U.S. Retail $ 252,497 15.0 % $ 368,221 19.4 % $ 146,806 8.8 % U.S. Wholesale 161,659 15.0 % 195,369 17.3 % 141,456 14.2 % International 56,617 12.5 % 63,806 13.8 % (1,224) (0.3) % Unallocated corporate (*) (91,602) n/a (130,317) n/a (97,169) n/a Total operating income $ 379,171 11.8 % $ 497,079 14.3 % $ 189,869 6.3 % (*) Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation. The tables below present additional segment information for our reportable segments for the periods presented: (dollars in millions) December 31, 2022 Charges: U.S. Retail U.S. Wholesale International Skip Hop tradename impairment charge $ 0.4 $ 5.6 $ 3.0 (dollars in millions) January 1, 2022 January 2, 2021 Charges: U.S. Retail U.S. Wholesale International U.S. Retail U.S. Wholesale International Organizational restructuring (1) $ (0.6) $ 0.1 $ 2.3 $ 5.0 $ 2.0 $ 2.2 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 2.0 1.7 0.2 9.6 9.6 2.2 Retail store operating leases and other long-lived asset impairments, net of gain (2) (2.6) — — 7.4 — 0.3 Total charges (3) $ (1.2) $ 1.8 $ 2.5 $ 36.1 $ 20.0 $ 26.4 (1) The fiscal year ended January 1, 2022 and the fiscal year ended January 2, 2021 also includes corporate charges related to organizational restructuring of $0.7 million and $7.4 million, respectively. (2) Related to gains on the modification of previously impaired retail store leases. (3) Total charges for the fiscal year ended January 1, 2022 exclude a customer bankruptcy recovery of $38,000. . Additional Data by Segment Significant expenses The table below represents Cost of goods sold by segment: For the fiscal year ended (dollars in thousands) December 31, 2022 % of January 1, 2022 % of Consolidated Net Sales January 2, 2021 % of Consolidated Net Sales Cost of goods sold : U.S. Retail $ 688,036 21.4 % $ 760,100 21.8 % $ 763,124 25.2 % U.S. Wholesale 798,370 24.9 % 825,770 23.7 % 729,425 24.1 % International 249,504 7.8 % 246,175 7.1 % 203,675 6.7 % Total cost of goods sold $ 1,735,910 54.0 % $ 1,832,045 52.5 % $ 1,696,224 56.1 % Note: Percentages may not be additive due to rounding. The table below represents SG&A expenses by segment: For the fiscal year ended (dollars in thousands) December 31, 2022 % of January 1, 2022 % of Consolidated Net Sales January 2, 2021 % of Consolidated Net Sales SG&A expenses : U.S. Retail $ 746,575 23.2 % $ 779,482 22.4 % $ 750,970 24.8 % U.S. Wholesale 125,173 3.9 % 127,826 3.7 % 122,555 4.1 % International 146,657 4.6 % 156,251 4.5 % 134,913 4.5 % Corporate 91,602 n/a 130,317 n/a 97,169 n/a Total SG&A expenses $ 1,110,007 34.6 % $ 1,193,876 34.2 % $ 1,105,607 36.6 % |
Inventory, net, by segment | The table below represents inventory by segment: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 U.S. Wholesale (*) $ 580,918 $ 513,702 U.S. Retail 57,518 50,563 International 106,137 83,477 Total $ 744,573 $ 647,742 (*) U.S. Wholesale inventories also include inventory produced and warehoused for the U.S. Retail segment. |
Consolidated Net Sales by Product | The table below represents consolidated net sales by product: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 January 2, 2021 Playclothes $ 1,125,352 $ 1,261,622 $ 1,052,178 Baby 1,103,023 1,124,961 1,026,910 Sleepwear 492,152 500,596 441,358 Other (*) 492,206 599,261 503,888 Total net sales $ 3,212,733 $ 3,486,440 $ 3,024,334 (*) Other product offerings include bedding, outerwear, swimwear, shoes, socks, diaper bags, gift sets, toys, and hair accessories. |
Property, plant, and equipment, net, by geographic area | The following represents Property, plant, and equipment, net, and Operating lease assets by geographic area: For the fiscal year ended (dollars in thousands) December 31, 2022 January 1, 2022 United States $ 580,171 $ 613,111 International 101,986 90,641 Total $ 682,157 $ 703,752 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets at the end of any comparable period, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Prepaid information technology-related contracts (1) 12,652 14,100 Prepaid insurance 2,133 4,887 Prepaid income taxes 1,110 815 Other 17,917 16,530 Prepaid expenses and other current assets (2) $ 33,812 $ 36,332 (1) Primarily related to cloud computing arrangements and software maintenance contracts. (2) Prepaid expense and other current assets as of January 1, 2022 were revised to reflect payments of rent before payment due date of $13.8 million. |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | Other current liabilities at the end of any comparable period, were as follows: (dollars in thousands) December 31, 2022 January 1, 2022 Unredeemed gift cards $ 23,303 $ 21,619 Income taxes payable 17,484 13,850 Accrued employee benefits (1) 16,356 26,517 Accrued salaries and wages 11,519 10,821 Accrued taxes 10,445 12,883 Accrued interest 8,868 11,942 Accrued bonuses and incentive compensation (2) 7,244 47,363 Accrued other 27,220 31,454 Other current liabilities $ 122,439 $ 176,449 (1) Decrease primarily related to decreased employer match of employee contributions for the defined contributions savings plan. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 211,748 | $ 984,294 |
Geographic Distribution, Foreign [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 44,100 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Accounts Receivable) (Details) - customer | 12 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
Sales [Member] | ||
Accounts Receivable [Abstract] | ||
Number of largest wholesale customers being discussed | 0 | |
maximum disclosure percentage of net sales | 10% | |
Accounts Receivable [Member] | ||
Accounts Receivable [Abstract] | ||
Number of largest wholesale customers being discussed | 3 | 3 |
Maximum disclosure percentage gross accounts receivable | 10% | 10% |
Accounts Receivable [Member] | Customer Concentration Risk | Three Wholesale Customers | ||
Accounts Receivable [Abstract] | ||
Customer concentration risk, gross accounts receivable | 56% | 52% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Inventories) (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Accounting Policies [Abstract] | |
Adjustments to inventory | $ 4.9 |
Percentage Change In Inventory Reserves | 34% |
Finished goods inventories, inventory reserves | $ 19.3 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property, Plant, and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Retail Store Fixtures, Equipment, and Computers [Member] | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Retail Store Fixtures, Equipment, and Computers [Member] | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Building and Building Improvements [Member] | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Building and Building Improvements [Member] | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 26 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Internal-Use Software ) (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer Software [Member] | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Computer Software [Member] | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Goodwill and Other Intangible Assets ) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | $ 9,000 | $ 0 | $ 26,500 | ||
Skip Hop tradename | |||||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | $ 9,000 | ||||
Indefinite intangible assets | $ 6,000 | $ 6,000 | |||
U.S. Wholesale | Skip Hop tradename | |||||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | 5,600 | ||||
International | Skip Hop tradename | |||||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | 3,000 | ||||
U.S. Retail | Skip Hop tradename | |||||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | $ 400 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Revenue Recognition) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Accounting Policies [Abstract] | |||
Cooperative advertising arrangements, fair value | $ 0.6 | $ 0.2 | $ 0.5 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Costs of Goods Sold and Selling, General and Administrative Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Accounting Policies [Abstract] | |||
Distribution expense | $ 216,200 | $ 206,600 | $ 190,700 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Advertising Expenses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Accounting Policies [Abstract] | |||
Advertising Expense | $ 96 | $ 102.8 | $ 75.6 |
Prepaid Advertising | $ 1.9 | $ 4.1 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Stock-Based Compensation Arrangements (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Accounting Policies [Abstract] | ||||
Granted (in shares) | 0 | 0 | 0 | 0 |
Stock options | ||||
Accounting Policies [Abstract] | ||||
Unrecognized compensation cost | $ 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Supplemental Cash Flow Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Accounting Policies [Abstract] | |||
Interest paid in cash | $ 41.2 | $ 59 | $ 55.1 |
Income taxes paid in cash | 64 | 115.3 | 54.7 |
Property, plant and equipment additions | $ 10.1 | $ 15.4 | $ 6 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 3,212,733 | $ 3,486,440 | $ 3,024,334 |
Royalty income, net | 25,820 | 28,681 | 26,276 |
Wholesale channel | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,252,671 | 1,298,118 | 1,116,332 |
Direct-to-consumer | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,960,062 | 2,188,322 | 1,908,002 |
Royalty income, net | |||
Disaggregation of Revenue [Line Items] | |||
Royalty income, net | 25,820 | 28,681 | 26,276 |
U.S. Retail | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,680,159 | 1,899,262 | 1,671,644 |
U.S. Retail | Wholesale channel | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 0 | 0 | 0 |
U.S. Retail | Direct-to-consumer | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,680,159 | 1,899,262 | 1,671,644 |
U.S. Retail | Royalty income, net | |||
Disaggregation of Revenue [Line Items] | |||
Royalty income, net | 8,815 | 8,541 | 8,732 |
U.S. Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,080,471 | 1,126,415 | 996,088 |
U.S. Wholesale | Wholesale channel | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,080,471 | 1,126,415 | 996,088 |
U.S. Wholesale | Direct-to-consumer | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 0 | 0 | 0 |
U.S. Wholesale | Royalty income, net | |||
Disaggregation of Revenue [Line Items] | |||
Royalty income, net | 12,915 | 15,808 | 13,120 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 452,103 | 460,763 | 356,602 |
International | Wholesale channel | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 172,200 | 171,703 | 120,244 |
International | Direct-to-consumer | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 279,903 | 289,060 | 236,358 |
International | Royalty income, net | |||
Disaggregation of Revenue [Line Items] | |||
Royalty income, net | $ 4,090 | $ 4,332 | $ 4,424 |
REVENUE RECOGNITION - Accounts
REVENUE RECOGNITION - Accounts Receivable from Customers and Licensees (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Receivables with Imputed Interest [Line Items] | ||
Accounts receivable, gross | $ 215,035 | $ 250,049 |
Accounts receivable, net | 198,587 | 231,354 |
Allowance for Chargebacks | 9,300 | 11,400 |
Accounts Receivable, Allowance for Credit Loss, Current | (7,189) | (7,281) |
Trade receivables from wholesale customers, net | ||
Receivables with Imputed Interest [Line Items] | ||
Accounts receivable, gross | 195,078 | 233,928 |
Royalties receivable, net | ||
Receivables with Imputed Interest [Line Items] | ||
Accounts receivable, gross | 5,386 | 5,769 |
Other receivables | ||
Receivables with Imputed Interest [Line Items] | ||
Accounts receivable, gross | 14,571 | 10,352 |
Less: Wholesale accounts receivable reserves | ||
Receivables with Imputed Interest [Line Items] | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ (16,448) | $ (18,695) |
REVENUE RECOGNITION - Wholesale
REVENUE RECOGNITION - Wholesale accounts receivable reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 18,695 | $ 12,366 | $ 11,283 |
Additional provisions | 9,280 | 13,282 | 9,625 |
Charges to reserve | (11,527) | (6,953) | (8,542) |
Ending balance | $ 16,448 | $ 18,695 | 12,366 |
Writeoffs | $ 6,500 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Unredeemed gift cards | $ 23,303 | $ 21,619 |
Unredeemed customer loyalty rewards | 5,276 | 5,659 |
Carter's credit card - upfront bonus | 714 | |
Total contract liabilities - current | 29,293 | 27,992 |
Contract liabilities - non-current | 1,429 | 2,143 |
Total contract liabilities | $ 30,722 | $ 30,135 |
LEASES - Operating lease term o
LEASES - Operating lease term of contract and Other (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 172.9 | $ 204.8 |
Operating lease assets obtained in exchange for operating lease liabilities | 144.9 | $ 39.6 |
Lessee Operating Lease Lease Not yet Commenced Liability Incurred | $ 11 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Initial term of lease | 3 years | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 10 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Initial term of lease | 10 years | |
Lessee, Operating Lease, Option to Extend | 5 years | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 11 years |
LEASES - Cost (Details)
LEASES - Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 160,210 | $ 166,481 | $ 180,056 |
Variable Lease, Cost | 66,400 | 64,410 | 71,971 |
Net lease cost | $ 226,610 | $ 230,891 | $ 252,027 |
LEASES - Supplemental balance s
LEASES - Supplemental balance sheet information (Details) | Dec. 31, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
Weighted average remaining operating lease term (years) | 4 years 8 months 12 days | 4 years 10 months 24 days |
Weighted average discount rate for operating leases | 3.72% | 3.26% |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 157,254 |
2024 | 151,059 |
2025 | 107,022 |
2026 | 73,533 |
2027 | 51,050 |
After 2027 | 80,640 |
Total lease payments | 620,558 |
Less: Interest | (56,385) |
Operating Lease, Liability | $ 564,173 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 759,350 | $ 744,930 | |
Accumulated depreciation and amortization | (569,528) | (528,926) | |
Total | 189,822 | 216,004 | |
Depreciation, Depletion and Amortization, Nonproduction | 61,500 | 90,400 | $ 90,300 |
Land, building, and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 332,971 | 333,322 | |
Fixtures, equipment, and computer hardware | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 281,830 | 280,022 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 115,706 | 113,284 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 28,843 | $ 18,302 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Goodwill and Other Intangible Assets [Line Items] | |||||
Foreign currency impact | $ (2,690) | $ 247 | |||
Goodwill | $ 209,333 | $ 212,023 | 209,333 | 212,023 | $ 211,776 |
Intangible asset impairment | 9,000 | 0 | 26,500 | ||
Amortization of intangible assets | 3,700 | 3,700 | 3,700 | ||
2023 | 3,701 | 3,701 | |||
2024 | 3,671 | 3,671 | |||
2025 | 3,671 | 3,671 | |||
2026 | 3,671 | 3,671 | |||
2027 | 3,539 | 3,539 | |||
Goodwill, Impaired, Accumulated Impairment Loss | 17,700 | 17,700 | |||
U.S. Retail | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Foreign currency impact | 0 | 0 | |||
Goodwill | 83,934 | 83,934 | 83,934 | 83,934 | 83,934 |
U.S. Wholesale | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Foreign currency impact | 0 | ||||
Goodwill | 74,454 | 74,454 | 74,454 | 74,454 | 74,454 |
International | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Foreign currency impact | (2,690) | 247 | |||
Goodwill | 50,945 | 53,635 | 50,945 | 53,635 | $ 53,388 |
Goodwill, Impaired, Accumulated Impairment Loss | 17,700 | 17,700 | |||
Finite-life tradenames | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Gross amount | 3,911 | 3,911 | 3,911 | 3,911 | |
Accumulated amortization | 1,751 | 1,501 | 1,751 | 1,501 | |
Net amount | 2,160 | 2,410 | $ 2,160 | 2,410 | |
Finite-life tradenames | Minimum | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 5 years | ||||
Finite-life tradenames | Maximum | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 20 years | ||||
Total tradenames, net | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Gross amount | 300,144 | 309,144 | $ 300,144 | 309,144 | |
Accumulated amortization | 1,751 | 1,501 | 1,751 | 1,501 | |
Net amount | 298,393 | 307,643 | $ 298,393 | 307,643 | |
Skip Hop customer relationships | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 15 years | ||||
Finite intangible assets, Gross amount | 47,300 | 47,300 | $ 47,300 | 47,300 | |
Accumulated amortization | 18,187 | 15,010 | 18,187 | 15,010 | |
Net amount | 29,113 | 32,290 | $ 29,113 | 32,290 | |
Carter’s Mexico customer relationships | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 10 years | ||||
Finite intangible assets, Gross amount | 3,125 | 3,047 | $ 3,125 | 3,047 | |
Accumulated amortization | 1,674 | 1,368 | 1,674 | 1,368 | |
Net amount | 1,451 | 1,679 | 1,451 | 1,679 | |
Total customer relationships, net | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Gross amount | 50,425 | 50,347 | 50,425 | 50,347 | |
Accumulated amortization | 19,861 | 16,378 | 19,861 | 16,378 | |
Net amount | 30,564 | 33,969 | 30,564 | 33,969 | |
Carter’s tradename | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Indefinite intangible assets | 220,233 | 220,233 | 220,233 | 220,233 | |
OshKosh tradename | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Indefinite intangible assets | 70,000 | 70,000 | 70,000 | 70,000 | |
Skip Hop tradename | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | 9,000 | ||||
Indefinite intangible assets | 6,000 | $ 15,000 | 6,000 | $ 15,000 | |
Indefinite intangible assets | 6,000 | $ 6,000 | |||
Skip Hop tradename | U.S. Retail | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | 400 | ||||
Skip Hop tradename | U.S. Wholesale | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | 5,600 | ||||
Skip Hop tradename | International | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | $ 3,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Cumulative translation adjustment, beginning balance | $ (21,302) | $ (21,307) | $ (26,522) |
Cumulative translation adjustment, current year change | (7,524) | 5 | 5,215 |
Cumulative translation adjustment, ending balance | (28,826) | (21,302) | (21,307) |
Accumulated other comprehensive income (loss), beginning balance | (28,897) | (32,760) | (35,634) |
Total other comprehensive income (loss) | (5,441) | 3,863 | 2,874 |
Accumulated other comprehensive income (loss), ending balance | (34,338) | (28,897) | (32,760) |
Unrealized gain (loss) on OshKosh defined benefit plan, net of (tax expense) or tax benefit | 1,739 | 3,973 | (2,197) |
Unrealized gain (loss) on Carter's post-retirement benefit obligation, net of tax (expense) benefit | 344 | (115) | (144) |
Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension/post-retirement liability adjustment, beginning balance | (8,920) | (12,893) | (10,696) |
Pension/post-retirement liability adjustment, current year change | 3,973 | (2,197) | |
Pension/post-retirement liability adjustment, ending balance | (7,181) | (8,920) | (12,893) |
Pension/post-retirement liability adjustments, tax benefit | 2,200 | 2,800 | |
Postretirement Benefit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension/post-retirement liability adjustment, beginning balance | 1,325 | 1,440 | 1,584 |
Pension/post-retirement liability adjustment, current year change | (115) | (144) | |
Pension/post-retirement liability adjustment, ending balance | 1,669 | 1,325 | $ 1,440 |
Pension/post-retirement liability adjustments, tax benefit | $ 500 | $ 400 |
LONG-TERM DEBT - Schedule (Deta
LONG-TERM DEBT - Schedule (Details) - USD ($) | Dec. 31, 2022 | Apr. 04, 2022 | Jan. 01, 2022 | May 11, 2020 | Mar. 14, 2019 |
Debt Instrument [Line Items] | |||||
Total long-term debt, net | $ 616,624,000 | $ 991,370,000 | |||
Long-term debt, BS | 991,370,000 | ||||
Total senior notes | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | 500,000,000 | 1,000,000,000 | |||
Less: unamortized issuance-related costs for senior notes | (3,376,000) | (8,630,000) | |||
Senior notes, net | 496,624,000 | 991,370,000 | |||
Secured revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Secured revolving credit facility | 120,000,000 | 0 | |||
$500 million, $5.500% Senior Notes due 2025 | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | 0 | $ 500,000,000 | 500,000,000 | $ 500,000,000 | $ 500,000,000 |
$500 million, $5.625% Senior Notes due 2027 | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | $ 500,000,000 | $ 500,000,000 |
LONG-TERM DEBT - Secured Revolv
LONG-TERM DEBT - Secured Revolving Credit Facility (Details) - USD ($) | Dec. 31, 2022 | Apr. 11, 2022 | Apr. 04, 2022 | Jan. 01, 2022 | May 11, 2020 | Mar. 14, 2019 |
Debt Instrument [Line Items] | ||||||
Outstanding letters of credit | $ 3,500,000 | $ 4,100,000 | ||||
Outstanding letters of credit | $ 3,500,000 | 4,100,000 | ||||
Secured Overnight Financing Rate (SOFR) | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 1.375% | 1.375% | ||||
Secured Overnight Financing Rate (SOFR) | United States Dollar Credit Facility - Amendment No.4 | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Interest Rate at Period End | 5.80% | |||||
Secured revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Secured revolving credit facility | $ 120,000,000 | 0 | ||||
Available for future borrowing | 726,500,000 | 745,900,000 | ||||
Secured revolving credit facility | Multicurrency Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Secured revolving credit facility | $ 0 | |||||
Secured revolving credit facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 0.375% | 0.375% | ||||
Senior notes | $500 million, $5.500% Senior Notes due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 5.50% | |||||
Debt Issuance Costs, Gross | $ 6,500,000 | |||||
Long-term Debt, Gross | $ 0 | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 |
LONG-TERM DEBT - Terms of the S
LONG-TERM DEBT - Terms of the Secured Revolving Credit Facility (Details) $ in Thousands | Apr. 11, 2022 USD ($) | Dec. 31, 2022 USD ($) | Apr. 04, 2022 USD ($) | Jan. 01, 2022 USD ($) | May 11, 2020 USD ($) | Mar. 14, 2019 USD ($) | Aug. 25, 2017 USD ($) |
Debt Instrument [Line Items] | |||||||
Springing Maturity Date Provision, Amount | $ 250,000 | ||||||
Line of Credit Facility, Commitment Fee Percentage | 0.20% | ||||||
Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Commitment Fee Percentage | 0.15% | ||||||
Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Commitment Fee Percentage | 0.25% | ||||||
Amendment No. 4 | |||||||
Debt Instrument [Line Items] | |||||||
Debt Issuance Costs, Gross | $ 2,400 | ||||||
Secured Overnight Financing Rate (SOFR) | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 1.375% | 1.375% | |||||
Secured revolving credit facility | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate, basis spread (as a percentage) | 0.125% | ||||||
Secured revolving credit facility | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate, basis spread (as a percentage) | 0.625% | ||||||
Secured revolving credit facility | Secured Overnight Financing Rate (SOFR) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate, basis spread (as a percentage) | 1.125% | ||||||
Secured revolving credit facility | Secured Overnight Financing Rate (SOFR) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate, basis spread (as a percentage) | 1.625% | ||||||
Senior notes | $500 million, $5.500% Senior Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt, Gross | $ 0 | $ 500,000 | $ 500,000 | $ 500,000 | $ 500,000 | ||
Stated interest rate | 5.50% | ||||||
Debt Issuance Costs, Gross | $ 6,500 | ||||||
Secured revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum leverage ratio | 3.50 | ||||||
Secured revolving credit facility | Scenario, Adjustment | |||||||
Debt Instrument [Line Items] | |||||||
Maximum leverage ratio | 4 | ||||||
Secured revolving credit facility | United States Dollar Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 750,000 | ||||||
Secured revolving credit facility | Multicurrency Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 100,000 | $ 100,000 | |||||
Secured revolving credit facility | Amendment No. 4 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 850,000 | ||||||
Secured revolving credit facility | Amendment No. 3 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 750,000 | ||||||
Secured revolving credit facility | United States Dollar Credit Facility - Amendment No.4 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 750,000 | ||||||
Secured revolving credit facility | United States Dollar Credit Facility - Amendment No.3 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 650,000 | ||||||
Secured revolving credit facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 0.375% | 0.375% |
LONG-TERM DEBT - Senior Notes (
LONG-TERM DEBT - Senior Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | Apr. 04, 2022 | May 11, 2020 | Mar. 14, 2019 | |
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 101% | ||||||
Gain (Loss) on Extinguishment of Debt | $ (19,940) | $ 0 | $ 0 | ||||
Guarantor subsidiaries percentage of ownership | 100% | 100% | |||||
Affirmative covenants | 25% | 25% | |||||
Guarantor subsidiaries percentage of ownership | 100% | 100% | |||||
Schedule of redemption price applicable where redemption occurs | The redemption price is applicable when the redemption occurs during the twelve-month period beginning on March 15 of each of the years indicated is as follows: Year Percentage 2023 101.41 % 2024 and thereafter 100.00 % | ||||||
Affirmative covenants | 25% | 25% | |||||
$500 million, $5.500% Senior Notes due 2025 | Senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt, Gross | $ 0 | $ 0 | 500,000 | $ 500,000 | $ 500,000 | $ 500,000 | |
Stated interest rate | 5.50% | ||||||
Proceeds from Issuance of Debt | 494,500 | ||||||
Debt Issuance Costs, Gross | $ 6,500 | ||||||
$500 million, $5.625% Senior Notes due 2027 | Senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt, Gross | 500,000 | 500,000 | $ 500,000 | ||||
Stated interest rate | 5.625% | ||||||
5.500% Senior Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Gain (Loss) on Extinguishment of Debt | (19,900) | ||||||
Gain (Loss) On Extinguishment Of Debt, Premium | $ 15,700 | ||||||
Write off of Deferred Debt Issuance Cost | $ 4,300 |
LONG-TERM DEBT Redemption Sched
LONG-TERM DEBT Redemption Schedule (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Instrument, Redemption [Line Items] | |
Redemption price, percentage | 101% |
2023 | Senior notes | $500 million, $5.625% Senior Notes due 2027 | |
Debt Instrument, Redemption [Line Items] | |
Redemption price, percentage | 101.41% |
2024 and thereafter | Senior notes | $500 million, $5.625% Senior Notes due 2027 | |
Debt Instrument, Redemption [Line Items] | |
Redemption price, percentage | 100% |
COMMON STOCK - Total Authorizat
COMMON STOCK - Total Authorizations and Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | Feb. 24, 2022 | |
Equity [Abstract] | ||||
Number of shares repurchased (in shares) | 3,747,187 | 2,967,619 | 474,684 | |
Aggregate cost of shares repurchased (dollars in thousands) | $ 299,667 | $ 299,339 | $ 45,255 | |
Average price per shares (in USD per share) | $ 79.97 | $ 100.87 | $ 95.34 | |
Stock repurchase, authorized amount | $ 1,000,000 | |||
Remaining capacity under authorization | $ 749,500 | $ 301,900 |
COMMON STOCK - Dividends (Detai
COMMON STOCK - Dividends (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 23, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Jan. 01, 2022 | Oct. 02, 2021 | Jul. 03, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Subsequent Event [Line Items] | |||||||||||
Dividend declared and paid per common share (in USD per share) | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.60 | $ 0.40 | $ 0.40 | $ 3 | $ 1.40 | $ 0.60 | |
Subsequent Event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Dividend declared and paid per common share (in USD per share) | $ 0.75 |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | May 17, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock available under the existing plan (in shares) | 18,778,392 | |||
Available for grant under the Plan (in shares) | 2,623,055 | |||
Intrinsic value of basic stock options exercised | $ 1,400,000 | $ 7,800,000 | $ 8,200,000 | |
Weighted- average exercise price per share, Exercisable (in dollars per share) | $ 92.99 | |||
Vested and expected to vest (in shares) | 563,048 | |||
Weighted- average exercise price per share, Vested and Expected to Vest (in dollars per share) | $ 92.99 | |||
Weighted-average expense recognition period | 2 years 3 months 18 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 205,120 | 116,238 | 140,345 | |
Granted (in shares) | 342,110 | |||
Granted (in dollars per share) | $ 89.31 | |||
Vested (in dollars per share) | $ 95.54 | $ 99.32 | $ 89.80 | |
Shares outstanding (in shares) | 629,686 | 544,713 | ||
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 94.71 | $ 98.33 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Unrecognized compensation cost | $ 0 | |||
Performance-based awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unrecognized compensation cost | $ 4,200,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 42,612 | |||
Shares outstanding (in shares) | 86,952 | |||
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 91.12 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 35,000,000 | |||
Time-based restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 30,800,000 | |||
Weighted-average expense recognition period | 2 years 4 months 24 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 162,508 | 116,238 | 125,209 | |
Vested (in dollars per share) | $ 97.29 | $ 99.32 | $ 90.52 | |
Performance-based restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average expense recognition period | 2 years 1 month 6 days | |||
Granted (in shares) | 89,760 | 0 | 58,320 | |
Granted (in dollars per share) | $ 91.12 | $ 0 | $ 108.76 |
STOCK-BASED COMPENSATION (Stock
STOCK-BASED COMPENSATION (Stock-Based Compensation by Award Type) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 205,120 | 116,238 | 140,345 |
Stock-based compensation | $ 21,879 | $ 21,029 | $ 12,830 |
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | $ 21,879 | $ 21,029 | $ 12,830 |
Vested (in dollars per share) | $ 95.54 | $ 99.32 | $ 89.80 |
Shares outstanding (in shares) | 629,686 | 544,713 | |
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 94.71 | $ 98.33 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 189 | $ 1,347 | $ 2,694 |
Time-based restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 162,508 | 116,238 | 125,209 |
Vested (in dollars per share) | $ 97.29 | $ 99.32 | $ 90.52 |
Time-based awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 17,893 | $ 14,756 | $ 10,468 |
Performance-based awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 42,612 | ||
Stock-based compensation | $ 2,091 | 3,608 | (1,927) |
Shares outstanding (in shares) | 86,952 | ||
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 91.12 | ||
Stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 1,706 | $ 1,318 | $ 1,595 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 28, 2019 | |
Stock Options (Number of shares) | ||||
Outstanding, beginning balance (in shares) | 658,666 | |||
Granted (in shares) | 0 | 0 | 0 | 0 |
Exercised (in shares) | (76,550) | |||
Forfeited (in shares) | 0 | |||
Expired (in shares) | (19,068) | |||
Outstanding, ending balance (in shares) | 563,048 | 658,666 | ||
Vested and expected to vest (in shares) | 563,048 | |||
Exercisable (in shares) | 563,048 | |||
Stock Options (Weighted-average exercise price) | ||||
Weighted- average exercise price per share beginning balance (in dollars per share) | $ 89.32 | |||
Granted (in dollars per share) | 0 | |||
Exercised (in dollars per share) | 58.23 | |||
Forfeited (in dollars per share) | 0 | |||
Expired (in dollars per share) | 105.76 | |||
Weighted- average exercise price per share ending balance (in dollars per share) | 92.99 | $ 89.32 | ||
Weighted- average exercise price per share, Vested and Expected to Vest (in dollars per share) | 92.99 | |||
Weighted- average exercise price per share, Exercisable (in dollars per share) | $ 92.99 | |||
Weighted-average remaining contractual terms (years), Outstanding | 3 years 7 months 17 days | |||
Weighted-average remaining contractual terms (years), Vested and Expected to Vest | 3 years 7 months 17 days | |||
Weighted-average remaining contractual terms (years), Exercisable | 3 years 7 months 17 days | |||
Aggregate intrinsic value, Outstanding | $ 430 | |||
Aggregate intrinsic value, Vested and Expected to Vest | 430 | |||
Aggregate intrinsic value, Exercisable | $ 430 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Restricted Stock | |||
Shares outstanding (in shares) | 544,713 | ||
Granted (in shares) | 342,110 | ||
Vested (in shares) | (205,120) | (116,238) | (140,345) |
Forfeited (in shares) | (52,017) | ||
Shares outstanding (in shares) | 629,686 | 544,713 | |
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 94.71 | $ 98.33 | |
Granted (in dollars per share) | 89.31 | ||
Vested (in dollars per share) | 95.54 | 99.32 | $ 89.80 |
Forfeited (in dollars per share) | 93.79 | ||
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 94.71 | $ 98.33 | |
Weighted-average expense recognition period | 2 years 3 months 18 days | ||
Performance-based restricted stock awards | |||
Restricted Stock | |||
Granted (in shares) | 89,760 | 0 | 58,320 |
Weighted-average grant-date fair value | |||
Granted (in dollars per share) | $ 91.12 | $ 0 | $ 108.76 |
Weighted-average expense recognition period | 2 years 1 month 6 days | ||
Time-based restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 30.8 | ||
Restricted Stock | |||
Vested (in shares) | (162,508) | (116,238) | (125,209) |
Weighted-average grant-date fair value | |||
Vested (in dollars per share) | $ 97.29 | $ 99.32 | $ 90.52 |
Weighted-average expense recognition period | 2 years 4 months 24 days | ||
Time-based restricted stock | Minimum | |||
Weighted-average grant-date fair value | |||
Vesting period | 3 years | ||
Time-based restricted stock | Maximum | |||
Weighted-average grant-date fair value | |||
Vesting period | 4 years | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 35 | ||
Performance-based awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 4.2 | ||
Restricted Stock | |||
Vested (in shares) | (42,612) | ||
Shares outstanding (in shares) | 86,952 | ||
Weighted-average grant-date fair value | |||
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 91.12 | ||
Weighted-average grant-date fair value outstanding (in dollars per share) | $ 91.12 | ||
Vesting period | 3 years |
STOCK-BASED COMPENSATION -Non-M
STOCK-BASED COMPENSATION -Non-Management- Board Directors (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value per share (in USD per share) | $ 89.31 | ||
Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from Issuance of Common Stock | $ 0 | ||
Number of shares issued (in shares) | 21,725 | 13,037 | 21,362 |
Fair value per share (in USD per share) | $ 78.51 | $ 101.09 | $ 74.67 |
Aggregate value (in thousands) | $ 1,706,000 | $ 1,318,000 | $ 1,595,000 |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined Benefit Plans Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Contribution | $ 200 | $ 300 | |
Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Assumptions Used in Calculation, Description | 0.25% | ||
Defined Benefit Plan, Benefit Obligation | $ 53,847 | 70,875 | $ 74,128 |
Defined Benefit Plan, Funded (Unfunded) Status of Plan | (1,398) | $ 2,186 | |
Effect of 0.25% increase on projected benefit obligation | $ 1,500 | ||
Expected long-term rate of return on plan assets | 5.50% | 6% | 6% |
Benefit payments | $ 3,000 | ||
Expected contribution and benefit payment, five years subsequent to 2017 | 19,510 | ||
2024 | 3,160 | ||
Pension Plans | Scenario, Adjustment | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Effect of 0.25% increase on projected benefit obligation | $ 16,000 |
EMPLOYEE BENEFIT PLANS - Benefi
EMPLOYEE BENEFIT PLANS - Benefit Obligation and Plan Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Change in plan assets: | |||
Contribution | $ 200 | $ 300 | |
Pension Plans | |||
Change in projected benefit obligation: | |||
Benefit obligation at beginning of period | 70,875 | 74,128 | |
Interest cost | 1,909 | 1,818 | $ 2,171 |
Actuarial gain | (16,021) | (2,405) | |
Benefits paid | (2,916) | (2,666) | |
Benefit obligation at end of period | 53,847 | 70,875 | 74,128 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 68,689 | 65,417 | |
Actual return on plan assets | (10,528) | 5,938 | |
Fair value of plan assets at end of year | 55,245 | 68,689 | 65,417 |
Benefits paid | 2,916 | 2,666 | |
Postretirement Benefit | |||
Change in projected benefit obligation: | |||
Benefit obligation at beginning of period | 2,662 | 2,998 | |
Service cost | 14 | 15 | 25 |
Interest cost | 63 | 57 | 94 |
Actuarial gain | (763) | (140) | |
Plan participants' contribution | 15 | 20 | |
Benefit obligation at end of period | 1,745 | 2,662 | $ 2,998 |
Change in plan assets: | |||
Benefits paid | 246 | 288 | |
Postretirement Benefit | Other Long Term Liabilities | |||
Change in projected benefit obligation: | |||
Benefit obligation at beginning of period | 2,400 | ||
Benefit obligation at end of period | $ 1,500 | $ 2,400 |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic (Benefit) Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Pension Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Interest cost | $ 1,909 | $ 1,818 | $ 2,171 |
Expected return on plan assets | (3,432) | (3,577) | (3,217) |
Amortization of net loss | 217 | 428 | 510 |
Net periodic pension benefit | (1,306) | (1,331) | (536) |
Total net periodic cost and changes recognized in other comprehensive income | 3,585 | 6,524 | 2,341 |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net (gain) loss arising during the fiscal year | (2,062) | (4,765) | 3,387 |
Amortization of net loss | (217) | (428) | (510) |
Total changes recognized in other comprehensive income | (2,279) | (5,193) | 2,877 |
Postretirement Benefit | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost - benefits attributed to service during the period | 14 | 15 | 25 |
Interest cost | 63 | 57 | 94 |
Amortization of net loss | (320) | (295) | (345) |
Net periodic pension benefit | (243) | (223) | (226) |
Total net periodic cost and changes recognized in other comprehensive income | 686 | 68 | 43 |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net (gain) loss arising during the fiscal year | (763) | (140) | (162) |
Amortization of net loss | (320) | (295) | (345) |
Total changes recognized in other comprehensive income | (443) | $ 155 | $ 183 |
Reclassification out of Accumulated Other Comprehensive Income | Pension Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Amortization of net loss | 200 | ||
Reclassification out of Accumulated Other Comprehensive Income | Postretirement Benefit | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Amortization of net loss | $ 400 |
EMPLOYEE BENEFIT PLANS - Assump
EMPLOYEE BENEFIT PLANS - Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Pension Plans | |||
Benefit obligation | |||
Discount rate | 5% | 2.75% | |
Net periodic pension cost | |||
Discount rate | 2.75% | 2.50% | 3.25% |
Expected long-term rate of return on plan assets | 5.50% | 6% | 6% |
Postretirement Benefit | |||
Benefit obligation | |||
Discount rate | 4.75% | 2.50% | |
Net periodic pension cost | |||
Discount rate | 2.50% | 2% | 3% |
EMPLOYEE BENEFIT PLANS (Expecte
EMPLOYEE BENEFIT PLANS (Expected Benefit Payments) (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Pension Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2023 | $ 3,000 |
2024 | 3,160 |
2025 | 3,310 |
2026 | 3,530 |
2027 | 3,580 |
2028-2032 | 19,510 |
Postretirement Benefit | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2023 | 200 |
2028-2032 | $ 700 |
EMPLOYEE BENEFIT PLANS (Plan As
EMPLOYEE BENEFIT PLANS (Plan Assets) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | Jan. 02, 2021 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Long-term rate of return | 0.0500 | ||
Contribution | $ 200 | $ 300 | |
Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 55,245 | 68,689 | $ 65,417 |
Pension Plans | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 55,009 | 68,465 | |
Pension Plans | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 236 | 224 | |
Pension Plans | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2,204 | 1,370 | |
Pension Plans | Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2,204 | 1,370 | |
Pension Plans | Cash and cash equivalents | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Pension Plans | U.S. Large-Cap blend | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 7,508 | |
Pension Plans | U.S. Large-Cap blend | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 7,508 | |
Pension Plans | U.S. Large-Cap blend | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Pension Plans | U.S. Large-Cap growth | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 3,390 | |
Pension Plans | U.S. Large-Cap growth | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 3,390 | |
Pension Plans | U.S. Large-Cap growth | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Pension Plans | U.S. Mid-Cap growth | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 3,426 | |
Pension Plans | U.S. Mid-Cap growth | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 3,426 | |
Pension Plans | U.S. Mid-Cap growth | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Pension Plans | U.S. Small-Cap blend | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 2,054 | |
Pension Plans | U.S. Small-Cap blend | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 2,054 | |
Pension Plans | U.S. Small-Cap blend | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Pension Plans | International blend | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 8,200 | |
Pension Plans | International blend | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 8,200 | |
Pension Plans | International blend | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Pension Plans | Corporate bond | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 53,041 | 39,970 | |
Pension Plans | Corporate bond | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 52,805 | 39,746 | |
Pension Plans | Corporate bond | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 236 | 224 | |
Pension Plans | Real estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 2,771 | |
Pension Plans | Real estate | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 2,771 | |
Pension Plans | Real estate | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 0 | $ 0 |
EMPLOYEE BENEFIT PLANS - Defi_2
EMPLOYEE BENEFIT PLANS - Defined Contribution Plans (Details) - United States - Defined Contribution Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Minimum service participation for the defined contribution plan (in months) | 1 month | ||
Minimum hours service participation for the defined contribution plan (in hours) | 1000 hours | ||
Defined contribution plan expense for the fiscal year | $ 8.2 | $ 16.1 | $ 7.7 |
Minimum age participation for the defined contribution plan | 21 years |
INCOME TAXES - (Details)
INCOME TAXES - (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Income Tax Disclosure [Abstract] | |
Undistributed Earnings of Foreign Subsidiaries | $ 97.3 |
Unrecognized deferred tax liability related to undistributed earnings | $ 4.1 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |||
Undistributed Earnings of Foreign Subsidiaries | $ 97,300 | ||
Current tax provision: | |||
Federal | 43,569 | $ 75,408 | $ 31,085 |
State | 8,307 | 16,905 | 6,331 |
Foreign | 15,562 | 19,761 | 11,105 |
Total current provision | 67,438 | 112,074 | 48,521 |
Deferred tax provision (benefit): | |||
Federal | (1,484) | (10,541) | (18,449) |
State | 425 | (2,428) | (3,741) |
Foreign | 319 | (563) | (1,064) |
Total deferred provision | (740) | (13,532) | (23,254) |
Total provision | $ 66,698 | $ 98,542 | $ 25,267 |
INCOME TAXES - Income Before In
INCOME TAXES - Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 227,929 | $ 333,900 | $ 73,525 |
Foreign | 88,807 | 104,390 | 61,459 |
Income before income taxes | $ 316,736 | $ 438,290 | $ 134,984 |
INCOME TAXES - Effective Rate R
INCOME TAXES - Effective Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Income tax rate reconciliation [Abstract] | |||
Statutory federal income tax rate | 21% | 21% | 21% |
State income taxes, net of federal income tax benefit | 2.80% | 3% | 2.70% |
Impact of foreign operations | (2.00%) | (1.80%) | (4.80%) |
Settlement of uncertain tax positions | (0.70%) | (0.30%) | (1.30%) |
Benefit from stock-based compensation | (0.10%) | (0.30%) | (1.10%) |
Goodwill impairments and other | 0.10% | 0.90% | 2.20% |
Total | 21.10% | 22.50% | 18.70% |
INCOME TAXES (Deferred Taxes) (
INCOME TAXES (Deferred Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21% | 21% | 21% |
Deferred tax assets: | |||
Accounts receivable allowance | $ 6,715 | $ 7,026 | |
Inventory | 16,902 | 11,923 | |
Accrued liabilities | 8,230 | 22,226 | |
Equity-based compensation | 4,397 | 3,410 | |
Deferred employee benefits | 3,247 | 5,144 | |
Leasing liabilities | 83,886 | 97,269 | |
Other | 3,724 | 3,845 | |
Total deferred tax assets | 127,101 | 150,843 | |
Deferred tax liabilities: | |||
Depreciation | (18,560) | (26,472) | |
Leasing assets | (72,162) | (80,818) | |
Tradename and licensing agreements | (73,534) | (76,275) | |
Other | (1,614) | (5,388) | |
Total deferred tax liabilities | 165,870 | 188,953 | |
Net deferred tax liability | 38,769 | 38,110 | |
Deferred tax assets | 2,466 | 2,800 | |
Deferred tax liabilities | $ (41,235) | $ (40,910) |
INCOME TAXES (Uncertain Tax Pro
INCOME TAXES (Uncertain Tax Provisions) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Unrecognized income tax benefits [Roll Forward] | |||
Beginning Balance | $ 8,856 | $ 12,523 | $ 13,923 |
Additions based on tax positions related to fiscal year | 1,040 | 810 | 760 |
Reductions for prior year tax positions | 0 | (2,207) | (104) |
Reductions for lapse of statute of limitations | (2,803) | (2,270) | (2,056) |
Ending Balance | 7,093 | 8,856 | 12,523 |
Impact of recognized tax benefit on effective tax rate, if recognized | 6,200 | ||
Tax reserve for which statute of limitations is expected to expire | 2,000 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 400 | 400 | $ 400 |
Interest accrued for uncertain tax positions | $ 1,500 | $ 1,800 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Weighted-average number of common and common equivalent shares outstanding: | |||
Basic number of common shares outstanding (in shares) | 38,822,737 | 42,853,009 | 43,242,967 |
Dilutive effect of unvested restricted stock awards (in shares) | 27,908 | 149,619 | 164,754 |
Diluted number of common and common equivalent shares outstanding (in shares) | 38,850,645 | 43,002,628 | 43,407,721 |
Basic net income per common share: | |||
Net income | $ 250,038 | $ 339,748 | $ 109,717 |
Income allocated to participating securities | 3,714 | 4,113 | 1,118 |
Net income available to common shareholders | $ 246,324 | $ 335,635 | $ 108,599 |
Basic net income per common share (in USD per share) | $ 6.34 | $ 7.83 | $ 2.51 |
Diluted net income per common share: | |||
Net income | $ 250,038 | $ 339,748 | $ 109,717 |
Income allocated to participating securities | (3,712) | (4,102) | (1,115) |
Net income available to common shareholders | $ 246,326 | $ 335,646 | $ 108,602 |
Diluted net income per common share (in USD per share) | $ 6.34 | $ 7.81 | $ 2.50 |
Anti-dilutive shares excluded from dilutive earnings per share calculations (in shares) | 526,618 | 176,475 | 564,131 |
SEGMENT INFORMATION - Reportabl
SEGMENT INFORMATION - Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 3,212,733 | $ 3,486,440 | $ 3,024,334 | ||
Percentage of total net sales | 100% | 100% | 100% | ||
Operating income (loss) | $ 379,171 | $ 497,079 | $ 189,869 | ||
Operating income as percentage of segment net sales | 11.80% | 14.30% | 6.30% | ||
Unallocated corporate expenses | $ 91,602 | $ 130,317 | $ 97,169 | ||
Goodwill impairment | 0 | 0 | 17,742 | ||
Intangible asset impairment | 9,000 | 0 | 26,500 | ||
Cost of goods sold | $ 1,735,910 | $ 1,832,045 | $ 1,696,224 | ||
Cost of goods sold as a percentage of total net sales | 54% | 52.50% | 56.10% | ||
Selling, general, and administrative expenses | $ 1,110,007 | $ 1,193,876 | $ 1,105,607 | ||
SG&A as a percentage of total net sales | 34.60% | 34.20% | 36.60% | ||
Provisions for doubtful accounts receivable from customers | $ 75 | $ 1,345 | $ 6,072 | ||
U.S. Retail | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,680,159 | 1,899,262 | 1,671,644 | ||
U.S. Wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,080,471 | 1,126,415 | 996,088 | ||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring restructuring | 700 | 7,400 | |||
Operating Segments | U.S. Retail | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 1,680,159 | $ 1,899,262 | $ 1,671,644 | ||
Percentage of total net sales | 52.30% | 54.50% | 55.30% | ||
Operating income (loss) | $ 252,497 | $ 368,221 | $ 146,806 | ||
Operating income as percentage of segment net sales | 15% | 19.40% | 8.80% | ||
Restructuring restructuring | $ (600) | $ 5,000 | |||
Goodwill impairment | 0 | 0 | |||
Incremental costs associated with COVID-19 pandemic | 2,000 | 9,600 | |||
Retail store operating leases and other long-lived asset impairments, net of gain | (2,600) | 7,400 | |||
Total charges | (1,200) | 36,100 | |||
Cost of goods sold | $ 688,036 | $ 760,100 | $ 763,124 | ||
Cost of goods sold as a percentage of total net sales | 21.40% | 21.80% | 25.20% | ||
Selling, general, and administrative expenses | $ 746,575 | $ 779,482 | $ 750,970 | ||
SG&A as a percentage of total net sales | 23.20% | 22.40% | 24.80% | ||
Operating Segments | U.S. Wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 1,080,471 | $ 1,126,415 | $ 996,088 | ||
Percentage of total net sales | 33.60% | 32.30% | 32.90% | ||
Operating income (loss) | $ 161,659 | $ 195,369 | $ 141,456 | ||
Operating income as percentage of segment net sales | 15% | 17.30% | 14.20% | ||
Restructuring restructuring | $ 100 | $ 2,000 | |||
Goodwill impairment | 0 | 0 | |||
Incremental costs associated with COVID-19 pandemic | 1,700 | 9,600 | |||
Retail store operating leases and other long-lived asset impairments, net of gain | 0 | 0 | |||
Total charges | 1,800 | 20,000 | |||
Cost of goods sold | $ 798,370 | $ 825,770 | $ 729,425 | ||
Cost of goods sold as a percentage of total net sales | 24.90% | 23.70% | 24.10% | ||
Selling, general, and administrative expenses | $ 125,173 | $ 127,826 | $ 122,555 | ||
SG&A as a percentage of total net sales | 3.90% | 3.70% | 4.10% | ||
Provisions for doubtful accounts receivable from customers | $ 38 | ||||
Operating Segments | International | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 452,103 | $ 460,763 | $ 356,602 | ||
Percentage of total net sales | 14.10% | 13.20% | 11.80% | ||
Operating income (loss) | $ 56,617 | $ 63,806 | $ (1,224) | ||
Operating income as percentage of segment net sales | 12.50% | 13.80% | (0.30%) | ||
Goodwill impairment | $ 17,700 | ||||
Incremental costs associated with COVID-19 pandemic | $ 200 | 2,200 | |||
Retail store operating leases and other long-lived asset impairments, net of gain | 0 | 300 | |||
Total charges | 26,400 | ||||
Cost of goods sold | $ 249,504 | $ 246,175 | $ 203,675 | ||
Cost of goods sold as a percentage of total net sales | 7.80% | 7.10% | 6.70% | ||
Selling, general, and administrative expenses | $ 146,657 | $ 156,251 | $ 134,913 | ||
SG&A as a percentage of total net sales | 4.60% | 4.50% | 4.50% | ||
Skip Hop tradename | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | $ 9,000 | ||||
Skip Hop tradename | U.S. Retail | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | $ 400 | ||||
Skip Hop tradename | U.S. Wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | 5,600 | ||||
Skip Hop tradename | International | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | $ 3,000 | ||||
Skip Hop tradename | Operating Segments | U.S. Retail | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | $ 0 | $ 500 | |||
Skip Hop tradename | Operating Segments | U.S. Wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | 0 | 6,800 | |||
Skip Hop tradename | Operating Segments | International | |||||
Segment Reporting Information [Line Items] | |||||
Restructuring restructuring | 2,300 | 2,200 | |||
Goodwill impairment | 0 | ||||
Intangible asset impairment | 0 | 3,700 | |||
Total charges | 2,500 | ||||
OshKosh tradename | Operating Segments | U.S. Retail | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | 0 | 13,600 | |||
OshKosh tradename | Operating Segments | U.S. Wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | 0 | 1,600 | |||
OshKosh tradename | Operating Segments | International | |||||
Segment Reporting Information [Line Items] | |||||
Intangible asset impairment | $ 0 | $ 300 |
SEGMENT INFORMATION - Inventory
SEGMENT INFORMATION - Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Segment Reporting Information [Line Items] | ||
Finished goods inventories | $ 744,573 | $ 647,742 |
Operating Segments | U.S. Wholesale | ||
Segment Reporting Information [Line Items] | ||
Finished goods inventories | 580,918 | 513,702 |
Operating Segments | U.S. Retail | ||
Segment Reporting Information [Line Items] | ||
Finished goods inventories | 57,518 | 50,563 |
Operating Segments | International | ||
Segment Reporting Information [Line Items] | ||
Finished goods inventories | $ 106,137 | $ 83,477 |
SEGMENT INFORMATION - Net Sales
SEGMENT INFORMATION - Net Sales (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Revenue from External Customer [Line Items] | |||
Net sales | $ 3,212,733 | $ 3,486,440 | $ 3,024,334 |
Playclothes | |||
Revenue from External Customer [Line Items] | |||
Net sales | 1,125,352 | 1,261,622 | 1,052,178 |
Baby | |||
Revenue from External Customer [Line Items] | |||
Net sales | 1,103,023 | 1,124,961 | 1,026,910 |
Sleepwear | |||
Revenue from External Customer [Line Items] | |||
Net sales | 492,152 | 500,596 | 441,358 |
Other | |||
Revenue from External Customer [Line Items] | |||
Net sales | $ 492,206 | $ 599,261 | $ 503,888 |
SEGMENT INFORMATION - Revenue (
SEGMENT INFORMATION - Revenue (Details) - Canada | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of total net sales | 64% | 65% | 70.30% |
International Long-Lived Assets, Percent of Total Long-Lived Assets | 63.30% | 82.70% |
SEGMENT INFORMATION - Long-Live
SEGMENT INFORMATION - Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 682,157 | $ 703,752 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 580,171 | 613,111 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 101,986 | $ 90,641 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
International Long-Lived Assets, Percent of Total Long-Lived Assets | 63.30% | 82.70% |
FAIR VALUE MEASUREMENTS - Inves
FAIR VALUE MEASUREMENTS - Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gain (Loss) on Investments | $ (2.5) | $ 2.3 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities | $ 15.1 | $ 17.5 |
FAIR VALUE MEASUREMENTS - Borro
FAIR VALUE MEASUREMENTS - Borrowings (Details) - USD ($) | Dec. 31, 2022 | Jan. 01, 2022 |
Secured revolving credit facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Secured revolving credit facility | $ 120,000,000 | $ 0 |
Total senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 482,400,000 | |
Long-term Debt, Gross | $ 500,000,000 | $ 1,000,000,000 |
FAIR VALUE MEASUREMENTS - Goodw
FAIR VALUE MEASUREMENTS - Goodwill, Intangible, and Long-Lived Tangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Fair Value Disclosures [Abstract] | |||||
Intangible asset impairment | $ 9,000 | $ 0 | $ 26,500 | ||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | 9,000 | $ 0 | $ 26,500 | ||
Skip Hop tradename | |||||
Fair Value Disclosures [Abstract] | |||||
Intangible asset impairment | $ 9,000 | ||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | $ 9,000 | ||||
Indefinite intangible assets | $ 6,000 | $ 6,000 | |||
Skip Hop tradename | U.S. Retail | |||||
Fair Value Disclosures [Abstract] | |||||
Intangible asset impairment | 400 | ||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | 400 | ||||
Skip Hop tradename | U.S. Wholesale | |||||
Fair Value Disclosures [Abstract] | |||||
Intangible asset impairment | 5,600 | ||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | 5,600 | ||||
Skip Hop tradename | International | |||||
Fair Value Disclosures [Abstract] | |||||
Intangible asset impairment | 3,000 | ||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Intangible asset impairment | $ 3,000 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 | Jan. 02, 2021 | |
Prepaid Expense and Other Assets, Current [Abstract] | ||||
Prepaid information technology-related contracts | $ 12,652 | $ 14,100 | ||
Prepaid insurance | 2,133 | 4,887 | ||
Prepaid income taxes | 1,110 | 815 | ||
Other | 17,917 | 16,530 | ||
Prepaid expenses and other current assets | [1] | $ 33,812 | 36,332 | |
Reclassification of prepaid expenses | $ 13,800 | $ 18,100 | ||
[1]Prepaid expense and other current assets and Current operating lease liabilities as of January 1, 2022 were revised to reflect the presentation for payments of rent before payment due date of $13.8 million. |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Other Liabilities Disclosure [Abstract] | ||
Unredeemed gift cards | $ 23,303 | $ 21,619 |
Income taxes payable | 17,484 | 13,850 |
Accrued employee benefits | 16,356 | 26,517 |
Accrued salaries and wages | 11,519 | 10,821 |
Accrued taxes | 10,445 | 12,883 |
Accrued interest | 8,868 | 11,942 |
Accrued bonuses and incentive compensation | 7,244 | 47,363 |
Accrued other | 27,220 | 31,454 |
Other current liabilities | $ 122,439 | $ 176,449 |